3. Relationship between tax revenues, deadweight loss, and demand elasticity The government is considering levying a tax of $25 per unit on suppliers of either Windbreakers or bucket hats. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for Windbreakers is shown by Bug: (on the rst graph}, and the demand for bucket hats is shown by DJ; (on the second graph]. Suppose the government taxes Windbreakers. The following graph shows the annual supply and demand for this good. It also shows the supply curve [3+ Tbs] shifted up by the amount of the proposed tax ($25 per windbreaker]. \fZomplete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals. Tax Revenue Deadweight Loss If the Government Taxes... (Dollars) (Dollars) Windbreakers at $25 per Windbreaker Bucket hats at $25 per hat 3uppose the government wants to tax the good that will generate more ta}: revenue at a lower welfare cost. In this case, it should tax v because; all else held constant, taxing a good With a relatively v elastic demand generates larger tax revenue and Lmaller deadweight loss