Quote:
Originally Posted by Bend it like Bourgeois
I'm not sure I understand.
If the cost of a litre of gas goes up...whatever, say 10%. Does the price at the pump go up 10%?
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It depends on the elasticities of demand and supply how much the tax is passed down to the consumer. In the case of gas, where demand is relatively inelastic, most of the tax incidence will be passed onto the consumer.