In which of the following cases is it most likely that an increase in the size of a tax will decrease tax revenue?
a. The price elasticity of demand is small and the price elasticity of supply is large.
b. The price elasticity of demand is large and the price elasticity of supply is small.
c. The price elasticity of demand and the price elasticity of supply are both small.
d. The price elasticity of demand and the price elasticity of supply are both large.
Answer: D