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The size of a tax and the deadweight loss that results from the tax are.

Sagot :

The deadweight loss that results from the tax measures the economic loss that is caused by a new tax.

What is deadweight loss?

Deadweight loss of taxation simply measures the overall economic loss caused by a new tax on a product or service.

The deadweight loss analyses the decrease in production as well as the decline in demand that is caused by the imposition of a tax. In this case, it is a lost opportunity cost.

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