Concept: Government tax revenue depends on how responsive buyers are to price changes.
Explanation: Inelastic demand means that a change in price causes only a small change in the quantity demanded.
When the government imposes a higher tax, the selling price rises.
For goods with inelastic demand, consumers still buy almost the same amount even at the higher price.
As a result, the government collects more revenue from each unit sold and also avoids a large loss in sales.
If demand were elastic, consumers would reduce purchases greatly after a price increase.
That would lower the total tax revenue the government could earn.
Therefore, taxing goods with inelastic demand is the most effective way to raise more revenue for the period.
Answer: B. Inelastic.