The deadweight loss from a tax is Select one a extra money c

The deadweight loss from a tax is:

Select one:

a. extra money consumers must pay for the tax.

b. the loss of consumer and producer surplus due to the tax.

c. affected by the size of the tax.

d. the loss of consumer and producer surplus due to the tax and affected by the size of the tax are correct

Solution

Deadweight loss happens when tax is imposed.

Tax leads to reduction in sum of total surplus that is consumer and producer surplus.

Larger is the size of tax, larger is the deadweight loss.

So tax leads to the loss of consumer and producer surplus and hence leads to dead weight loss and this loss increases with increase in tax.

So correct option is d.)