1. The mayor is considering a $1 tax on each sale at lemonade stands or hot dog stands. Before the tax, suppose that lemonade and hot dogs have similar prices, quantities, and elasticity of supply; but the demand for lemonade is more inelastic.
The mayor wants to raise as much tax revenue as possible while having suppliers pay most of the tax. You should advise her that
A. she should tax lemonade stands.
B. she should tax hot dog stands.
C. she cannot achieve both goals taxing one good.
D. she can tax either with the same effect as long as sellers are legally responsible.