Question

taxes may cause deadweight losses because________.

a. they transfer purchasing power from buyers to the government.
b. they lower the surplus in the market.
c. they increase consumer surplus at the expense of producer surplus
d. they transfer purchasing power from sellers to the government.

The answer is C?

Answer 1

No.

http://www.investopedia.com/terms/d/deadweight-loss-of-taxation.asp

Answer 2

okay, B. they lower the surplus in the market.

Answer 3

That's not what I learned from the link above.

Answer 4

Okay, Ms. Sue this is very confusing for me is the answer A?

Answer 5

Yes.

Answer 6

Thanks for the link and I will read more on this subject matter.. thanks again

Answer 7

You're welcome.