Question

Tax An article by Paul Krugman published in the New York Times on March 15th, 2000 argued against George W. Bush’s reduction in gasoline taxes as a method for offsetting the spike in gasoline prices at the time (article attached). Analyze the article from what you have learned in class. What may a reduction in gasoline prices affect the demand for gasoline; and consequently affect the price? How elastic is the short-run Supply Curve and the Demand Curve? Who reaps the benefits if gasoline taxes are reduced or eliminated? How would this action affect the price of gasoline in the short run? Explain in words and graphically. I need the graphically explanation

Answer 1