How increasing tax rates do 10 % may affect company revenue, consumer expenditure and government tax revenue in the short run for imported wine? Consider in your answer that the price elasticity for Chilean wine is -1.6 and that for Italian and French wine is -0.3 (Keat, Young & Erfle, 2013, p.85).
Hint: apply the concept of elasticity and your answer must refer to the effect on revenue, consumer expenditure and government tax revenue. Separate your answer for (a) Chilean wine and (b) Italian and French wine