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​Imagine That the State Legislature Raises the Tax on Gasoline

Question 287

Multiple Choice

​Imagine that the state legislature raises the tax on gasoline by 10 cents/gallon.What most likely happens next?


A) ​Service station operators pass along the tax to you, adding the 10 cents to the price of a gallon of gas. 
B) ​Service station operators grumble, but pay the tax without passing the cost along to you. 
C) ​Service station operators pass along as much of the tax to you as they can, probably about 6 cents/gallon. 
D) ​None of these choices.

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