In spring 2008,the U.S.Congress proposed to tax oil companies because of their near-monopoly status.This could have the unintended consequence of

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If Congress follows through on the proposal to tax oil companies, the taxes could raise the overall cost of producing oil. The oil companies may pass on the increased cost to consumers, leading to a higher equilibrium price. However, the extent to which this happens depends on the elasticity of demand for oil. If demand is relatively inelastic, the price increase caused by the tax may be greater than the amount of the tax itself.

In Spring 2008,the U