State of california needs to increase tax revenue

Reference no: EM13696160

Suppose the state of California needs to increase tax revenue. The government is considering raising the per-unit tax on consumption good in order to generate more tax revenue. If they choose between a good that is relatively more demand elastic or relatively more demand inelastic, which would be more likely to generate more tax revenue? Assume that supply curve has the same elasticity for both goods.

Reference no: EM13696160

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