An excise tax may be imposed on a commodity in order to

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An excise tax may be imposed on a commodity in order to raise revenue for the government, or in order to reduce the consumption of the good.

a) Why are these goals in conflict with each other?

b) What is the relevance of the price elasticity of demand in determining which of the goals is likely to be most fully met?

c) Why do you think excise taxes on gasoline, tobacco, and alcohol are common?

Reference no: EM13379444

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