Question on: JAMB Economics - 2020
In order to raise more revenue for a certain period, the government should impose higher taxes on goods whose demands are___
A
elastic
B
inelastic
C
perfectly elastic
D
unitary elastic
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Correct Option: B
The reason the government can impose more taxes in inelastic is becauseĀ Ā the buyer'sĀ demandĀ does not change as much as the price changes.
This means that an increase in price of such goods as a result of high taxes or other factors does not causeĀ a significant change in the demand.
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