Inceasing the tax on gasoline???

@Trish012 (101)
Puerto Rico
April 9, 2007 9:33am CST
Opponents of increasing tax on gasoline argue that the big oil companies just pass the tax along to the consumers. Do you agree or disagree? Explain why or why not?? Thanks
1 response
@guilinfd (76)
• China
26 Apr 07
it depends on the monopoly power of the firm or the relative elasticity of demand to the elasticity of supply. to give a example, if the elasticity of demand is bigger than the supply, then the tax burden is more in the supplier side, vice versa