Alcohol and cigarettes have an....demand, which make them a good steady source of goveernment revenue?

a. elastic
b. inelastic
c. static
d. dynamic

Answer:
B. Inelastic.

The change in price of alcohol and cigarettes has little effect on the amount sold. That makes them a good place to add taxes. People will keep buying them and tax revenues will go up.
inelastic (B)

Adding to their price makes them more expensive but the demand for them varies but little.

Graphically try something like y=100x where x represents quantity and y reps price, add tax by y = 100x+ tax and see what happens.

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