Governments impose taxes for several reasons the most


Governments impose taxes for several reasons. The most obvious reason is to raise revenues for the government. If the goal of a government is to raise the maximum revenues, should a per unit tax be imposed on an item that has a price elasticity of demand that is elastic or inelastic. A per unit tax is a tax that is charged as so much per unit of the item sold. An example would be a tax of 42 cents per gallon of gas sold. The tax would be 42 cents a gallon no matter if a gallon of gas had price of $2.00 or $4.00. Explain your answer.

Request for Solution File

Ask an Expert for Answer!!
Microeconomics: Governments impose taxes for several reasons the most
Reference No:- TGS01247078

Expected delivery within 24 Hours