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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (19794)	5/1/2008 11:39:58 AM
From: brushwud	Respond to of 149317

Any economist could have predicted this: If you lower the price of gas without increasing the supply, it will only raise demand and thus boost prices. Any economist could have predicted, "If you lower the price...it will only...boost prices"? That reporter clearly must have a college degree in order to buy such logic. I think an economist would predict that eliminating a tax lowers the supply curve so it intersects the demand curve at a lower price, higher quantity. How this gain in economic efficiency is shared between consumers and producers and how much lower the new price will be depends on the elasticities of demand and supply, but the net price reduction will almost always be less than the amount of the tax.