| Squilliam said:
The more competitive the market, the less market power the producers/suppliers have. As the economy tends to be more competitive than not companies hold a little but not absolute market power. Also the more flexible consumers are, the more market power they have. If the price of canola oil goes up, people can easily substitute it for olive oil. So whilst Canola oil farmers would suffer, olive oil farmers would benefit. |
And in this scenerio, when the people who produce canola switch over to producing another kind of oil or go out of business how does the tax associated with canola oil increase the revenue of the government; and how do the companies who depend on selling their goods and services to canola oil producers benefit from the reduced market for their goods and services?
You're looking at things based on too much of a (moronic) academic model which leads far too many economists to make poor decisions when it comes to the economy.
