What is deadweight loss?

Question

. The deadweight loss from an excise tax comes about because:

A) the number of transactions in the market is reduced.

B) some mutually beneficial transactions do not take place.

C) a quota rent exists.

D) of both A and B.

Answer 1

d?

Answer 2

d

Answer 3

Its D because dead weight loss occurs when the excise tax causes a greater quantity supplied than quantity demanded. This means that some otherwise mutually beneficial transactions will stop being profitable, and the number of transactions in a market is reduced.