Competitive market environment is deadweight losses

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One of the problems in a competitive market environment is deadweight losses.

What are deadweight losses, and what are their causes?

What are the market effects of a deadweight loss?

What are the major factors that determine who will bear the burden of a tax or the incidence of a tax?

If the government uses taxation to deal with a situation, how would the various elasticities of supply and demand affect the deadweight loss of that tax?

If the government proposes the use of cap and tax programs to deal with deadweight losses, how would they work? Explain using examples to illustrate your point. What are the pros and cons of such a program?

Reference no: EM131163572

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