Suppose the government is attempting to discourage consumption of two goods: Good X and Good Y. Good X has a very elastic demand and Good Y has a very inelastic demand. The government plans to implement a tax on the suppliers of both goods. If the elasticity of supply for both goods is perfectly elastic, which tax will be more effective at reducing consumption and why?

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The Answer of Suppose the government is attempting to discourage consumption of two goods: Good X and Good Y. Good X has a very elastic demand and Good Y has a very inelastic demand. The government plans to implement a tax on the suppliers of both goods. If the elasticity of supply for both goods is perfectly elastic, which tax will be more effective at reducing consumption and why?

Suppose the Government Is Attempting to Discourage Consumption of Two