In order to raise more revenue for a certain pe... - JAMB Economics 2020 Question
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
correct option: b
The reason the government can impose more taxes in inelastic is because the buyer's demand 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 cause a significant change in the demand.
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