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Inefficient for asian governments to subsidize gasoline

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Reference no: EM131104100

Consumers in Asia are feeling the heat of skyrocketing oil prices as governments start rolling back subsidies that have kept costs for gasoline and other fuel artificially low. Retail prices of petroleum-based products like gasoline, kerosene, and diesel are highly subsidized in many Asian countries, in part to make them affordable to citizens who earn lower wages than in the developed world.

a. Explain why it is inefficient for Asian governments to subsidize gasoline.

Reference no: EM131104100

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