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by XEKEP
4866 days ago
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In your example you should be adding a fixed cost to both goods. I.e. imagine, that a country introduced a universal vehicle tax of 20K. So, buyers will be choosing between 40K Toyota and 70K BMW. So, before the tax BMW would be 2.5 times more expensive then Toyota, but only 1.75 times after the tax. Which still does not answer the question about the increase in consumption in absolute or relative terms. |
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