In order to increase revenue, government should tax commodities for which demand is

  • A perfectly price inelastic
  • B price inelastic
  • C price elastic
  • D unitary elastic
jamb 2022english-language

The correct answer is B. price inelastic

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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