If the tax on gasoline is increased, gas stations are most likely to pass most of this increase to the consumer if the demand is

Question

Quizplus · Accepted Answer

When demand is very inelastic, it means that consumers have few alternatives to gasoline and will continue to purchase it regardless of price changes. In this situation, gas stations can pass on most of the tax increase to consumers because the demand is relatively unaffected by the price increase.

If the Tax on Gasoline Is Increased, Gas Stations Are