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?
1
Expert's answer
2017-02-24T15:06:05-0500
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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