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tax incidence

Stuck on two questions, need at least 2 to 3 paragraphs for each answer.

1.Ultimately who will pay the cost? Look up tax incidence on Wikipedia.

2. Can other externalities be dealt with similarly?

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Stuck on two questions, need at least 2 to 3 paragraphs for each answer.

1. Ultimately who will pay the cost? Look up tax incidence on Wikipedia.
The costs will ultimately be borne by electricity consumers. The EPA rules are expected to increase the costs of the coal and oil fired power plants. The implementation of these rules will mean that these power plants will have to charge more to its customers. Since, there is no subsidy on electricity; the power plants will charge more money from customers.

Why will the power plants be able to charge more for the electricity they sell to the consumers? The argument is that electricity is a necessity and so the consumers cannot cut down its use drastically. In economic terms its ...

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This solution gives you a detailed discussion on tax incidence.

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