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> Those costs get passed onto the consumer in the form of higher prices Not necessarily. The burden of a tax depends on supply and demand price elasticity. If
by voisin 2y ago
> Those costs get passed onto the consumer in the form of higher prices
Not necessarily. The burden of a tax depends on supply and demand price elasticity. If demand is relatively price inelastic, then consumers pay the tax. If it is relatively price elastic, then companies pay via lower profits or reduce supply.
- hypeatei 2y agoThat is true. Not every single cent will be passed on, but there will be inflationary effects regardless.