tudy the Zucchini market. Suppose the equilibrium price E1 is initially $3.00 a pound. Suppose the government is taxing the production of zucchinis. The amount of the tax is $1.20 per pound. The supply for zucchinis is neither elastic nor inelastic and the demand for zucchinis is neither elastic nor inelastic. Suppose that the new equilibrium price E2 is $4.00. The quantities exchanged are 200 pounds of zucchinis at $3.00 a pound, 100 pounds of zucchinis at $4.00 a pound.

Following the tax, the deadweight loss reflects that:

too many zucchinis are exchanged at a SMC>SMB

too many zucchinis are exchanged at a SMC

too few zucchinis are exchanged at a SMC>SMB

too few zucchinis are exchanged at a SMC