Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 8 - Part III - Application: The Costs of Taxation - Quick Check Multiple Choice - Page 169: 5

Answer

b. government's tax revenue

Work Step by Step

If the tax is greater than the halfway point, the tax revenue is not maximized and is decreasing as the tax get larger, because the market is so much smaller. By lowering the tax, more of the product is made and purchased, so more revenue is made.
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