Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 8 - Part III - Application: The Costs of Taxation - Questions for Review - Page 168: 5

Answer

Deadweight loss grows larger, tax revenue increases less and less, then starts to fall.

Work Step by Step

As a tax grows larger, it distorts incentives more and reduces the size of the market.
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