Multiple Choice
The government is considering to levy a 10% tax on the sale of cigarettes. How would the effect on tax revenue depend on whether the demand for cigarettes is elastic or inelastic?
A) Elastic demand => less revenue.
B) Elastic demand => more revenue.
C) Inelastic demand => less revenue.
D) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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