Based upon the following estimates of price elasticity of demand, which markets are the best markets to tax if the government's goal is to raise tax revenue? Why?
$\begin{array} { l c }
\text { Praduct } & \text { Price Elasticity of Demand } \
\text { Gasoline } & 0.8 \
\text { Paper towels } & 2.2 \
\text { Strawberries } & 1.5 \
\text { Alcohol } & 0.6 \
\text { Yachts } & 3.2
\end{array}$

Question

Based upon the following estimates of price elasticity of demand, which markets are the best markets to tax if the government's goal is to raise tax revenue? Why?
 $\begin{array} { l c } 
\text { Praduct } & \text { Price Elasticity of Demand } \
\text { Gasoline } & 0.8 \
\text { Paper towels } & 2.2 \
\text { Strawberries } & 1.5 \
\text { Alcohol } & 0.6 \
\text { Yachts } & 3.2
\end{array}$

Quizplus · Accepted Answer

The Answer of Based upon the following estimates of price elasticity of demand, which markets are the best markets to tax if the government's goal is to raise tax revenue? Why?
 $\begin{array} { l c } 
\text { Praduct } & \text { Price Elasticity of Demand } \
\text { Gasoline } & 0.8 \
\text { Paper towels } & 2.2 \
\text { Strawberries } & 1.5 \
\text { Alcohol } & 0.6 \
\text { Yachts } & 3.2
\end{array}$

Based Upon the Following Estimates of Price Elasticity of Demand