4 ms·
of course you can also shift demand curve. If you have current price P and demand D, and you slap a tax T on top of the price P, the demand at price P is going
by beefield 5y ago
of course you can also shift demand curve. If you have current price P and demand D, and you slap a tax T on top of the price P, the demand at price P is going to be lower, thus the whole curve is shifted.
Yes, ceteris paribus if you lower the price, there is going to be more demand. But you can't lower the price ceteris paribus because there is not going to be more supply. So in order to lower the price you need to figure out a way to lower the demand. Be it regulation, taxation or cheaper alternative products or something else. As long it is cheaper to run a solar panel than a generator in a developing country, it does not matter if the fossil fuels become 10 times cheaper, people will use the solar panel.
Higher price means higher resource extraction and consumption, that is a fact that you can deduce by just looking a the supply side. If you double gas/oil price, for sure more is going to be extracted? (And by price I do not mean post-tax/regulation consumer price, but the price the gas/oil producer gets from the commodity in the market)