When a tax on a good starts small and is gradually increased, tax revenue will

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As a tax on a good increases from a small amount, tax revenue initially rises because the government collects more per unit sold. However, as the tax becomes too high, it discourages consumption and production, leading to a decrease in the quantity sold, and thus, tax revenue eventually falls. This is consistent with the Laffer Curve concept.

When a Tax on a Good Starts Small and Is