Prior to any taxes, suppose the equilibrium price of gasoline is $3 per gallon. A $1 tax is levied on each gallon of gas that is supplied. As a result, the price of gas rises to $3.75 per gallon. The incidence of the $1 tax is: A) $0.25 paid by consumers, $0.75 paid by producers B.) $0.50 paid by consumers, $0.50 paid by producers C) $1.00 paid by producers, $0 paid by consumer D.) $0.75 paid by consumers, $$0.25 paid by producers
Happy Valentine's. Play us a rose, you're organic, man.
Victims of circumstance owe it to fate. Victims of choice owe it to themselves.
It looks to me like all the answers are wrong. The producers are going to pass along all additional costs to the suppliers who can in turn absorb some or pass them along in toto .
Jay
Got an answer for lbchkpoint? Would you like to comment on the posted answers, or vote for the one which you think is the best?
Sign up for a free account, or sign in (if you're already a member).
Other people asked questions on various topics, and are still waiting for answer. Would be great if you can take a sec and answer them
