Asked by
Shane Olenick
on Oct 25, 2024
Verified
A higher rate is MOST likely to decrease the amount of revenue that the government collects from an excise tax if demand is _____ and supply is _____.
A) elastic;elastic
B) elastic;inelastic
C) inelastic;elastic
D) inelastic;inelastic
Elastic Demand
The case in which the price elasticity of demand is greater than 1.
Excise Tax
A tax levied on specific goods, services, or transactions, often with the aim of discouraging their use or raising revenue.
Elastic Supply
A scenario where the quantity supplied of a good or service changes significantly in response to changes in its price.
- Investigate the bond between tax rates and tax revenue under the perspective of elasticity.
- Comprehend the responsiveness of demand and supply in influencing the apportionment of taxes.
Verified Answer
MM
Learning Objectives
- Investigate the bond between tax rates and tax revenue under the perspective of elasticity.
- Comprehend the responsiveness of demand and supply in influencing the apportionment of taxes.