Suppose that policymakers are considering placing a tax on either of two markets. in market a, the tax will have a significant effect on the price consumers pay, but it will not affect equilibrium quantity very much. in market b, the same tax will have only a small effect on the price consumers pay, but it will have a large effect on the equilibrium quantity. other factors are held constant. in which market will the tax have a larger deadweight loss?
a. market a
b. market b
c. the deadweight loss will be the same in both markets.
d. there is not enough information to answer the question.