Concept:Tax revenue is larger when a price increase does not cause quantity demanded to fall sharply.
That happens when demand is inelastic.
Explanation:When government imposes a tax, the price of the commodity rises.
If demand is price inelastic, the percentage fall in quantity demanded is smaller than the percentage rise in price.
So consumers continue to buy nearly the same quantity, and government earns more tax revenue.
If demand is price elastic, quantity demanded falls heavily after the tax, so tax revenue will not increase.
Therefore, the government should target commodities whose price elasticity of demand is less than
1, that is, commodities with price inelastic demand.
Answer:B. price inelastic