Re: OT: Increasing Tax on Oil Companies

On Feb 29, 7:26 pm, jbuc...@xxxxxxxxx (J Buck) wrote:
Why is this so hard to understand?  

Probably because there is something called the price elasticity of
demand. Until you can determine the PED of oil (and that varies
depending on consumption level as well as local supply), all this
rudimentary suppositions aren't worth anything. And we still have to
think about income elasticity of demand as well if you want to start
figuring out whether the cost would be passed over to consumers. Firms
in the real world sometimes to bear additional expenses for a defined
period rather than passing on the cost. (In the long term this is
probably untenable). I have doubts whether they would do this in the
current situation, but the reality isn't that simple as you describe
.

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