Taxes cause deadweight losses because
a. taxes reduce the sum of producer and consumer surpluses by more than the amount of the tax revenue.
b. taxes prevent buyers and sellers from realizing some of the gains from trade.
c. taxes cause marginal buyers and marginal sellers to leave the market, causing the quantity sold to fall.
d. All of the above are correct.
Answer: D
Microeconomics
- An increase in the price level may be caused
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