The government is deciding where to place a tax of $0.50 because they want to raise revenues.In which market will they likely generate more revenue?

Question

Quizplus · Accepted Answer

In markets with inelastic supply and demand, consumers are less responsive to changes in price and will be willing to continue buying the same quantity at a slightly higher price. Similarly, producers are less able to adjust their production in response to the tax, resulting in a smaller decrease in quantity traded. This makes it more likely for the government to generate more revenue in markets with inelastic supply and demand.

The Government Is Deciding Where to Place a Tax of $0.50