Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 22
If the goal is to have the smallest deadweight loss, then a $1 tax should be imposed upon:
a
a market with highly elastic demand and highly elastic supply.
b
a market with highly inelastic demand and highly inelastic supply.
c
a market with highly elastic demand and unit elastic supply.
d
a market with unit elastic demand and unit elastic supply.
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