Government revenue from an excise tax of a given amount is greater when demand is relatively inelastic than when it is relatively elastic.

Name: Government revenue from an excise tax of a given amount is greater when demand is relatively inelastic than when it is relatively elastic.
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Question

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The tax will result in larger quantity sold the more inelastic demand is.Since the tax is on a per unit basis,the tax revenue is greater for the inelastic demand curve.

Government Revenue from an Excise Tax of a Given Amount