Generally, luxury goods have relatively elastic demand where demand for necessities (like food) is relatively inelastic. What explains why luxuries are taxed at higher rates than necessities? A.The Ramesy rule suggests luxury goods should be taxed at higher rates. B.Society values redistribution and equity. C.all of these. D.Politicians do not understand the concept of elasticity.

Generally, luxury goods have relatively elastic demand where demand for necessities (like food) is relatively inelastic. What explains why luxuries are taxed at higher rates than necessities? A.The Ramesy rule suggests luxury goods should be taxed at higher rates. B.Society values redistribution and equity. C.all of these. D.Politicians do not understand the concept of elasticity.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 2AQ

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