Suppose the government has the choice between taxing drinkable water and taxing peanuts. According to the inverse elasticity rule

The government is indifferent between taxing drinkable water and peanuts

The government should tax peanuts because it is less harmful to the population

The government should tax drinkable water because the demand for drinkable water is inelastic

Thegovernment should tax drinkable water because the demand for drinkable water is elastic

None of the above