If the federal government raises taxes on gasoline and consumers take on most of the burden of the tax, then what happens to the demand or supply curve?

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Social Studies

26 January, 14:49

If the federal government raises taxes on gasoline and consumers take on most of the burden of the tax, then what happens to the demand or supply curve?

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Deandre Good · Answer 1

If the federal government are likely to raise their taxes on gasoline, with the consumers taking most of the burden of the tax, the demand or supply curve in regards to the gasoline will likely be relatively inelastic. In other words, the gasoline may be insensitive in regards to change in terms of the price that it produces or shows.

Burns · Answer 2

There would be an upward movement along the supply curve for gasoline ... This is the best I can remember.