The Indian Government imposed heavy taxes on commodity to reduce its consumption by the public. Such heavy taxes will decrease the demand of the…

CA Foundation · Business Economics · MTP · April 2025
The Indian Government imposed heavy taxes on commodity to reduce its consumption by the public. Such heavy taxes will decrease the demand of the commodity only when:
(A) A. ed = 0
(B) B. ed > 1
(C) C. Ed<1
(D) D. ed = 1

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. ed > 1

Topics: Theory of Demand and Supply

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