Multiple Choice
Good A has a price elasticity of demand of .27, while good B has a price elasticity of demand of 2.9. To raise the most tax revenue, the government should:
A) place a unit tax on good A.
B) place a unit tax on good B.
C) raise the price elasticity of demand for good A.
D) subsidize the production of good B.
Correct Answer:
Verified
Correct Answer:
Verified
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