The elasticity of demand at currently consumed quantities fo

The elasticity of demand (at currently consumed quantities) for one good is ¼ while that for another is 3. Both goods are consumed in identical quantities. Suppose your objective is to raise revenue for education by imposing a 6% tax on purchases of one or the other good. Assuming you only care about raising the largest amount of money possible, which good would you tax? Why?  

Solution

i will tax good with less elasticity or with Ed=1/4, because due to less elasticity, price rise due to tax will lead to less fall in quantity demanded for good with less elasticity as compared to good with more elasticity. therefore more tax can be collected if tax is imposed on less elastic good, more money can be collected.

whereas if tax is imposed on good with higher elasticity , quantity demanded will fall by more and less taxes can be collected.

as initial quantity is same for both goods, price rise by 6% will lead to only 1.5% fall in quantity demanded for good with elasticity=1/4 and quantity demanded will fall by 18% for good with Ed= 3. so it is better to imposetax on good with elasticity and collect more tax revenue