sdccd Mesa Miramar Continuing Ed My Institution Open OnDeman

?sdccd Mesa Miramar Continuing Ed. My Institution Open OnDemand INQUIZITIVE Chapter 4: Market Outcomes and Tax Incidence Page 134 4.3 Why do taxes create deadweight loss in otherwise efficient markets? What are two reasons the government might choose to levy an excise tax on a product? Drog word/s) below to fill in the blankjs) in the passage. The government might levy an excise tax on a product if it wants to collect from the purchase of that particular good or service. The government would prefer to tax goods with a tax a product to incentivize consumers toIf taxes are too high on a certain good or service, many consumers wilthat good. demand. The government might also larlboro highly inelastic consumer surplus pay more money* modify their behavior tax revenue highly elasticcontinue buying cease buyin

Solution

The government might levy an excise tax on a product if it wants to collect Tax Revenue from the purchase of t hat particular good or service. The government would prefer tax goods with a highly inelastic demand. The government might also tax a product to incentivize consumers to Modify their behavior . If taxes are to high on a certain good or service, many consumer will cease buying that good.