Asked by Mansi Sharma on May 12, 2024
Verified
Define the deadweight loss of a tax.
Deadweight Loss
The loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.
- Clarify the influence of taxation on economic productivity and the implications for deadweight loss.
Verified Answer
MM
Maria MoralesMay 17, 2024
Final Answer :
The deadweight loss of a tax is the reduction in economic well-being of taxpayers in excess of the amount of revenue raised by the tax.
Learning Objectives
- Clarify the influence of taxation on economic productivity and the implications for deadweight loss.