A state government wants to increase the taxes on cigarettes to increase tax revenue. This tax would only be effective in raising new tax revenues…
CA Foundation · Business Economics · MTP · June 2024
A state government wants to increase the taxes on cigarettes to increase tax revenue. This tax would only be effective in raising new tax revenues if the price elasticity of demand is:
Suggested Answer and Working Notes:
Correct Answer: Option (C)
C. inelastic.
Topics: Public Finance
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