Multiple Choice
Good A has a price elasticity of demand of 0.27,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) subsidise the production of good B.
E) cut its spending for various social programs.
Correct Answer:
Verified
Correct Answer:
Verified
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