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Figure 8-6 A graph of price, P, versus quantity, Q, shows a supply curve, S, rising linearly from the origin, and 4 demand curves, D1,
Figure 8-6 A graph of price, P, versus quantity, Q, shows a supply curve, S, rising linearly from the origin, and 4 demand curves, D1, D2, D3, and D4. Each successive demand curve descends at a slower rate than the previous demand curve, and begins from a lower price, which means each successive demand curve is more elastic than the last. Refer to Figure 8-6. Suppose the government imposes a $1 tax in each of the four markets represented by demand curves D 1 , D 2 , D 3 , and D 4 . The deadweight will be the smallest in the market represented by a. D4. b. D3. c. D1. d. D2
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