Based Upon the Following Estimates of Price Elasticity of Demand

question 153

Essay

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?
$\begin{array} { l c } \text { Praduct } & \text { Price Elasticity of Demand } \\\text { Gasoline } & 0.8 \\\text { Paper towels } & 2.2 \\\text { Strawberries } & 1.5 \\\text { Alcohol } & 0.6 \\\text { Yachts } & 3.2\end{array}$

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