> I think you are in error if you think that somehow making the change with regulations means the cost wont be passed to consumers. That's a misconception spre

> I think you are in error if you think that somehow making the change with regulations means the cost wont be passed to consumers. That's a misconception spread by the anti-tax crowd. The seller can take the increased cost out of their own profits or they can try to pass it along as an increased the price, but they can't just demand that people buy their product at the higher price. First, in this respect, there is no difference between regulatory costs and other costs (e.g., raw materials); it's just costs. Second, goods are generally already priced to maximize profit (profit each x items sold), and not based on cost (e.g., not 'cost + 50%'); increasing prices (the first factor) causes the quantity of sales (the second factor) to drop. The ability to increase prices without sacrificing profits depends on the price elasticity of the item: if you have the only well in a desert, you can charge what you want for water; if it is 100 yards from a clear, running river, your ability to increase prices is limited. For example, it might cost Coca-Cola to 2 cents to make a liter of Coke and they might charge $2. If regulations increase the cost to 10 cents, will they now charge $2.10? No, they chose $2 as the price that generates maximum revenue; that doesn't change with the increased cost. They likely eat the cost themselves.