If the government imposes an excise tax on a good, it will collect the most tax revenues from it if the demand for the good is
A)elastic.
B)inelastic.
C)unit elastic.
D)perfectly elastic.

Question

Quizplus · Accepted Answer

When demand is inelastic, consumers are less sensitive to price changes, meaning they will continue to buy the good even as the price increases due to the tax. This results in higher tax revenues for the government.

If the Government Imposes an Excise Tax on a Good