After economics class one day,your friend suggests that taxing food would be a good way to raise
revenue because the demand for food is quite inelastic.In what senseis taxing fooda“good”way
to raise revenue?
Taxing food can be a good way to raise revenue because it is a relatively inelastic good, meaning that people will still buy it even if the price increases. This means that the government can raise more revenue from taxing food than from taxing other goods that are more elastic. Additionally, taxing food can be seen as a way to discourage unhealthy eating habits, as people may be less likely to buy unhealthy food if it is more expensive.