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 would increase the cost of gasoline and reduce its consumption. Both buyers and sellers respond to changes in the market price, so it would not matter which side of the market the tax is imposed on. However, the specific elasticity of demand and supply for gasoline should also be taken into consideration when determining the size of the tax.

If the Government Wants to Reduce the Burning of Fossil