A tax on a good whose demand is price elastic will be effective in discouraging consumption of that good.

Name: A tax on a good whose demand is price elastic will be effective in discouraging consumption of that good.
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Question

Quizplus · Accepted Answer

When demand is price elastic, consumers are sensitive to price changes, so a tax that raises the price will significantly reduce the quantity demanded, effectively discouraging consumption.

A Tax on a Good Whose Demand Is Price Elastic