In order to increase revenue, government should tax commo...
In order to increase revenue, government should tax commodities for which demand is
Perfectly price inelastic
Price inelastic
Price elastic
Unitary elastic
Correct answer is B
For government to generate more revenue, tax on commodities should be price inelastic. Inelastic means when tax is imposed, consumers do not react to tax i.e more of the goods are demanded.
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