A higher rate is most likely to decrease the amount of revenue that the government collects from an excise tax if demand is _____ and supply is _____.

Name: A higher rate is most likely to decrease the amount of revenue that the government collects from an excise tax if demand is _____ and supply is _____.
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Question

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When both demand and supply are elastic, a higher excise tax rate can lead to a significant decrease in quantity sold, reducing total tax revenue.

A Higher Rate Is Most Likely to Decrease the Amount