> Say Canada does what you say will fix everything
If you thought I was saying it would fix anything except the number on the price tag, you must have misinterpreted my comment.
> and in theory supply will increase
I don't believe an increase in taxes would cause supply to increase.
> there's only so much you can be elastic in your demand.
Demand doesn't only mean how many loaves of bread people want, or how badly they want them. It's also how many dollars they can and will pay. Picture goods being sold at an auction, as they essentially are. With fewer dollars in everyone's pockets, the winning bid will be lower, even if the bidders are just as hungry.
> I don't believe an increase in taxes would cause supply to increase.
Sorry, i meant increase proportionally to demand (because demand would go down, so there would be more supply than demand).
> With fewer dollars in everyone's pockets, the winning bid will be lower, even if the bidders are just as hungry
Not if the winning bid comes from another country, or the supplier can afford to wait (because remember, we're talking about inelastic goods - the supplier knows people need to eat and heat themselves).
If you thought I was saying it would fix anything except the number on the price tag, you must have misinterpreted my comment.
> and in theory supply will increase
I don't believe an increase in taxes would cause supply to increase.
> there's only so much you can be elastic in your demand.
Demand doesn't only mean how many loaves of bread people want, or how badly they want them. It's also how many dollars they can and will pay. Picture goods being sold at an auction, as they essentially are. With fewer dollars in everyone's pockets, the winning bid will be lower, even if the bidders are just as hungry.