Neither the demand nor the supply of gasoline is perfectly elastic or inelastic. When the government increases the federal tax on gasoline, the effect on buyers is that the price of gasoline

Question

Quizplus · Accepted Answer

When the government increases the federal tax on gasoline, the price typically rises because the tax is an additional cost that suppliers pass on to consumers, especially when neither demand nor supply is perfectly elastic or inelastic.

Neither the Demand nor the Supply of Gasoline Is Perfectly