Finance minister in Quantitative Finance.
Quantitative Finance
Level
2
In a socialist economy, can the elasticity of demand of various commodities ever come handy for a finance minister?
Bonus:- Prove your answer.
Check out the set Quantitative Finance questions
No
Yes
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1 solution
Elastocty of demand does help a finance minister. If the motive of the government is profit maximisation, then the finance minister levies higher tax on demand inelastic commodities and if their motive is welfare maximistation he levies less tax on demand inelastic goods. I would appreciate other viewpoints.