The more ________ the demand is for a product, the ________ tax revenue that will be raised by taxing the product.
A) elastic; more
B) inelastic; more
C) inelastic; less
D) Tax revenues are unrelated to a product's price elasticity of demand.

Question

Quizplus · Accepted Answer

Inelastic demand means that consumers are less sensitive to price changes, so when a product with inelastic demand is taxed, consumers are likely to continue purchasing it despite the price increase, leading to higher tax revenue.

The More ________ the Demand Is for a Product, the ________

The More the Demand Is for a Product, the