In Which of the Following Cases Will an Increase in the Tax

question 259

Essay

In which of the following cases will an increase in the tax rate most likely decrease tax revenue?
A.The elasticity of demand is 3.3 and the elasticity of supply is 2.1.
B.The elasticity of demand is 3.3 and the elasticity of supply is 0.5.
C.The elasticity of demand is 0.2 and the elasticity of supply is 2.1.
D.The elasticity of demand is 0.2 and the elasticity of supply is 0.5.

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Definitions:

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