The government decides to reduce air pollution by reducing the use of petrol. It imposes a tax of R0.50 on each litre of petrol sold.
a. Should it impose this tax on petrol companies or motorists? Create a graph to justify your answer.
b. If demand for petrol were more elastic, would this tax be more or less effective in reducing the quantity of petrol consumed?
c. To what extent are consumers of petrol and oil industry workers affected by this tax?

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The Answer of The government decides to reduce air pollution by reducing the use of petrol. It imposes a tax of R0.50 on each litre of petrol sold.
a. Should it impose this tax on petrol companies or motorists? Create a graph to justify your answer.
b. If demand for petrol were more elastic, would this tax be more or less effective in reducing the quantity of petrol consumed?
c. To what extent are consumers of petrol and oil industry workers affected by this tax?

The Government Decides to Reduce Air Pollution by Reducing the Use