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Bs economic Acha yh batao When ever price elasticity of demand is Inelastic tax are (effective or in effective)

Placing a tax on a good, shifts the supply curve to the left. It leads to a fall in demand and higher price.
However, the impact of a tax depends on the elasticity of demand.
If demand is inelastic, a higher tax will cause only a small fall in demand. Most of the tax will be passed onto consumers. When demand is inelastic, governments will see a significant increase in their tax revenue.

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