A higher tax rate is more likely to increase tax revenue collected if the price elasticity of:

Name: A higher tax rate is more likely to increase tax revenue collected if the price elasticity of:
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Question

Quizplus · Accepted Answer

When both demand and supply are inelastic (low elasticity), consumers and producers are less responsive to price changes, meaning they will continue to buy and sell similar quantities even if prices rise due to higher taxes, thus increasing tax revenue.

A Higher Tax Rate Is More Likely to Increase Tax