If the Government Wants to Generate Large Revenues from Placing

question 27

Multiple Choice

If the government wants to generate large revenues from placing a tax on the consumption of a particular good, it should choose a good for which

• A) the demand is price elastic
• B) the demand is unitary elastic
• C) the demand is price inelastic
• D) there are many good substitutes available for the good

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Definitions:

Discrepancy Of Quantity

A mismatch between the amount ordered and the amount delivered or received in a business transaction.

Manufacturers

Companies or individuals that produce finished goods from raw materials through the use of various processes, equipment, and operations.

Sales Promotion

A marketing technique used to boost sales and attract customer attention through special offers, discounts, or other incentives.

Promotional Spending

Funds allocated by a business towards advertising, public relations, and sales promotions to increase brand awareness and sales.