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Answer to Question #65381 in Microeconomics for erucha

Question #65381
How knowledge of price elasticity of demands magnitude can be of use to a government contemplating a commodity tax?
Expert's answer
the price elasticity is very important, especially in the implementation of government taxes. And the main feature is the price elasticity decreasing demand for goods subject to a price increase for goods. Exactly this relationship is important in shaping the level of taxes.

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