Respuesta :
To Reduced Deadweight Gains government typically put sales taxes on inelastic goods rather than on elastic goods.
The variation in the quantity demanded will be smaller when the government taxes goods with inelastic demand than when the government taxes elastic goods. When inelastic demand goods are taxed, efficiency suffers less.
What distinguishes elastic from inelastic goods?
If a product's quantity demand changes more than proportionally as its price rises or falls, it is said to be elastic. On the other hand, a product is said to be inelastic if its quantity demand changes little when its price changes.
Products that are inelastic are typically necessities without viable alternatives. Utilities, prescription drugs, products are the most frequently encountered goods with inelastic demand. Due to the fact that demand remains constant regardless of price changes, companies that sell such goods can adjust their prices with greater flexibility.
Learn more about inelastic goods:
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