aded ▁area ▁between ▁the ▁supply ▁and ▁demand ▁curves . ▁While ▁the ▁demand ▁curve ▁shows ▁the ▁value ▁of ▁goods ▁to ▁the ▁consum ers , ▁the ▁supply ▁curve ▁reflect s ▁the ▁cost ▁for ▁produ cers . ▁As ▁the ▁example ▁above ▁explains , ▁when ▁the ▁government ▁impos es ▁a ▁tax ▁upon ▁tax pay ers , ▁the ▁tax ▁increases ▁the ▁price ▁paid ▁by ▁buy ers ▁to ▁P c ▁and ▁decre ases ▁price ▁received ▁by ▁sell ers ▁to ▁P p . ▁Bu y ers ▁and ▁sell ers ▁( Am ie ▁and ▁Will ) ▁give ▁up ▁the ▁deal ▁between ▁them ▁and ▁exit ▁the ▁market . ▁Thus , ▁the ▁quantity ▁sold ▁reduces ▁from ▁Q e ▁to ▁Qt . ▁The ▁dead weight ▁loss ▁occurs ▁because ▁the ▁tax ▁det ers ▁these ▁kinds ▁of ▁benef icial ▁tr ades ▁in ▁the ▁market . ▁ ▁Det erm in ants ▁of ▁dead weight ▁loss ▁ ▁Price ▁el astic ities ▁of ▁supply ▁and ▁demand ▁determine ▁whether ▁the ▁dead weight ▁loss ▁from ▁a ▁tax ▁is ▁large ▁or ▁small . ▁This ▁measures ▁to ▁what ▁extent ▁quantity ▁supplied ▁and ▁quantity ▁demanded ▁respond ▁to ▁changes ▁in ▁price . ▁For ▁instance , ▁when ▁the ▁supply ▁curve ▁is ▁relatively ▁in el astic , ▁quantity ▁supplied ▁respond s ▁only ▁minim ally ▁to ▁changes ▁in ▁the ▁price . ▁However , ▁when ▁the ▁supply ▁curve ▁is ▁more ▁el astic , ▁quantity ▁supplied ▁respond s ▁significantly ▁to ▁changes ▁in ▁price . ▁In ▁other ▁words , ▁when ▁the ▁supply ▁curve ▁is ▁more ▁el astic , ▁the ▁area ▁between ▁the ▁supply ▁and ▁demand ▁curves ▁is ▁larger . ▁Similarly ,