If you want to maximize tax revenue, you should advocate taxing inputs used in the production of goods:
A)with many substitutes.
B)that are elastically demanded.
C)that are inelastically demanded.
D)that have price elasticities of demand equal to approximately 1 so that total sales are unaffected.
E)with many complements.

Question

Quizplus · Accepted Answer

Inputs that are inelastically demanded are necessary for the production process and cannot be easily substituted, meaning that a tax on these inputs will not significantly decrease their usage. This can lead to higher tax revenue for the government.

If You Want to Maximize Tax Revenue, You Should Advocate