If the government imposes a sin tax on alcohol and the demand for alcohol is inelastic, the tax will cause a:
A. large decrease in quantity demanded but will generate more revenue than it would if the demand were elastic.
B. large decrease in quantity demanded but will generate less revenue than it would if the demand were elastic.
C. small decrease in quantity demanded but will generate less revenue than it would if the demand were elastic.
D. small decrease in quantity demanded but will generate more revenue than it would if the demand were elastic.
Answer: D
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