Asked by
Ahmed Khaled
on Oct 25, 2024
Verified
If the demand for luxury yachts is very elastic,then a yacht tax would lead to:
A) a large deadweight loss.
B) no deadweight loss.
C) a small deadweight loss.
D) a large amount of tax revenue but no deadweight loss.
Luxury Yachts
High-end, luxurious boats equipped with sophisticated amenities, designed for comfort and leisure.
Deadweight Loss
A loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is unachievable.
Elastic
Describes a situation in which the demand or supply for a good or service significantly changes in response to a change in price.
- Absorb the implications of elasticity for deadweight loss.
- Identify goods with the least and most deadweight loss due to taxation.
Verified Answer
DJ
Learning Objectives
- Absorb the implications of elasticity for deadweight loss.
- Identify goods with the least and most deadweight loss due to taxation.
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