Why are excise taxes more effective at raising tax revenues when applied to products with price inelastic

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Why are excise taxes more effective at raising tax revenues when applied to products with price inelastic demand versus ones with price elastic demand? Under what conditions would it be possible for tax revenues to decline with higher excise taxes?

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Principles Of Cost Accounting

ISBN: 9780840037039

15th Edition

Authors: Edward J. Vanderbeck

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Question Posted: Jul 12, 2017 09:17 AM

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Why are excise taxes more effective at raising tax revenues when applied to products with price inelastic

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Excise taxes These are taxes on specific goods Excise taxes may be expressed as a percent of the price of the good eg 10 of the purchase price or per unit of the good 500 per unit Both types are used ...View the full answer

Principles Of Cost Accounting

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