Asked by
Quinn Lendyll Teope
on Oct 25, 2024
Verified
If demand and supply are both very elastic,a decrease in the rate of an excise tax will likely:
A) decrease government revenue.
B) increase government revenue.
C) not affect government revenue.
D) make demand and supply both inelastic.
Excise Tax
A tax levied on specific goods or services, such as alcohol, tobacco, and gasoline.
Elastic Supply
A situation where the quantity supplied of a good changes significantly in response to changes in its price.
Elastic Demand
a situation where the quantity demanded of a good or service significantly changes in response to a change in price.
- Determine the association between tax rates and tax revenue in relation to elasticity.
- Investigate the impact of excise tax elimination on market surplus and fiscal income.
Verified Answer
RH
Learning Objectives
- Determine the association between tax rates and tax revenue in relation to elasticity.
- Investigate the impact of excise tax elimination on market surplus and fiscal income.