Andrea asked in Social ScienceEconomics · 1 month ago

Suppose the gasoline tax is increased. Will gasoline sellers, workers, or consumers be most impacted?

Use the concept of elasticity to explain your answer.

3 Answers

  • Oiy
    Lv 6
    1 month ago

    The price elasticity of demand for gas is inelastic, but not perfectly inelastic. That means the demand still responds to the price change because of the taxes. Even in the short run, people might stop driving for public transport. In the Long run, the demand is more elastic. People might sell their cars. So the effect in the short run is that the demand will shift to the left because of the taxes. The demand is still inelastic, which means the consumers will pay more taxes than the sellers. So the impact is on both of them, but not a fair share.

  • JuanB
    Lv 7
    1 month ago

    The elasticity of demand for gas is generally considered inelastic.  Meaning the price can go up and consumers will still buy it.  So a tax increase will be paid by customers and they will still buy a similar amount of gas as if there was no tax.  The consumer therefore would be impacted most.

  • CB
    Lv 7
    1 month ago

    Consumers of course - corporation do not pay taxes the consumer price increases pay the taxes - HENCE - the notion of getting the "fair share" of taxes out of corporations translates to Higher prices to the consumer - the biggest BS political statement of the CENTURY is the corps paying their fare share of taxes.....

Still have questions? Get answers by asking now.