A government that wants to get more revenue will increase the tax on commodities with a

Assessment: WAEC SSCE - Economics - 2013 (Objective) Subject: Economics

Question 1 Report

A government that wants to get more revenue will increase the tax on commodities with a

Answer Details
A government that wants to get more revenue will increase the tax on commodities with a low price elasticity of demand. This is because goods with a low price elasticity of demand have relatively inelastic demand, meaning that consumers will continue to purchase them even if the price increases. Therefore, the government can increase taxes on such goods without significantly affecting the quantity demanded by consumers, resulting in more revenue for the government.
Read lesson note on The Theory Of Demand (JAMB)
Read lesson note on The Theory Of Price Determination (JAMB)
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