Monday, January 2, 2012

Comment on the impact of taxation and subsidies on the market referring to the following. (Economists HELP!)?

An important economic principle is: the customer always pays. The producer doesn't pay -- he won't sell a product below cost. The deliveryman doesn't pay - he collects his transportation charge, regardless of the cost or value of the merchandise. The retailer doesn't pay -- won't stay in business by selling below cost. So, if the cost goes up anywhere along the line, the consumer pays. Similarly, if the cost goes down, the consumer will ultimately benefit.

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