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What is Analyzing Petrol Tax Impact on Demand about?

1. A simple model of supply and demand was used to analyze the impact of a proposed Rs 5 per liter tax on petrol in India. Under the tax, the price of petrol would increase from Rs 10 to Rs 12.22 per liter and consumption would fall from 100 million liters per year to 89 million liters per year. 2. The tax would raise Rs 445 million per year in government revenue. However, the deadweight loss to consumers and producers in the form of reduced consumer and producer surplus would be Rs 27.5 million per year,

Author

lulughosh

Language

EN