Multiple Choice
Which of the five goods, A to E, whose price elasticities of demand are shown in the choices below, is the best candidate to tax if the goal is to acquire maximum tax revenue?
A) good A, with price elasticity of 0.90
B) good B, with price elasticity of 3.40
C) good C, with price elasticity of 1.25
D) good D, with price elasticity of 0.50
E) good E, with price elasticity of 1.00
Correct Answer:
Verified
Correct Answer:
Verified
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