Chapter 3 (Figure 3.3, p. 69) has already shown the impact of a tax on price and output. Of course, the extent of that impact will depend on the price elasticity of demand for the particular product,...

Chapter 3 (Figure 3.3, p. 69) has already shown the impact of a tax on price and output. Of course, the extent of that impact will depend on the price elasticity of demand for the particular product, here the particular mode of transport. Market-based policy instruments can focus on either the demand or the supply side of the transport issue.

Figure 3.3