Which of the following statements correctly describes the relationship between the size of the deadweight loss and the amount of tax revenue as the size of a tax increases from a small tax to a medium
tax and finally to a large tax? A. The size of the deadweight loss increases, but the
tax revenue first increases, then decreases. B. Both the size of the deadweight loss and tax
revenue increase.
C The size of the deadweight loss increases, but the
tax revenue decreases.
D. Both the size of the deadweight loss and tax
revenue decrease.