If the government wants to reduce the burning of fossil fuels,it should impose a tax on

Question

Quizplus · Accepted Answer

Imposing a tax on either buyers or sellers of gasoline will increase the price of gasoline, which will discourage people from using it excessively. However, it is difficult to determine which side of the market is less elastic (responsive to price changes) as it depends on numerous factors such as availability of substitutes, income levels, etc. Therefore, it is best to impose the tax on both buyers and sellers to ensure a significant decrease in the burning of fossil fuels. This will also distribute the burden of the tax between consumers and producers, preventing either party from bearing excessive costs.

If the Government Wants to Reduce the Burning of Fossil