In order to raise more revenue for a certain period, the government should impose higher taxes on goods whose demand

  • A elastic
  • B inelastic
  • C perfectly elastic
  • D unitary elastic
jamb 2020economics

The correct answer is B. inelastic

The government should impose higher taxes on goods whose demand is inelastic.

When the demand for a good is inelastic, it means that the quantity demanded does not change significantly when the price changes.

Therefore, even if the government imposes a higher tax on such goods, it will not significantly affect the quantity demanded, and the government can raise more revenue.

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