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It could also mean the demand for these items is very elastic, so manufacturers will have to eat the tax or higher manufacturing costs.
by fountainofage 8y ago
It could also mean the demand for these items is very elastic, so manufacturers will have to eat the tax or higher manufacturing costs.
- nybble41 8y agoThat assumes that manufacturers can reduce their margins without going out of business. That will not generally be true in a competitive market, however, since economic profit (which includes opportunity costs) tends toward zero.