Kentucky and Montana Have Identical State Gasoline Taxes of 27

question 14

Essay

Kentucky and Montana have identical state gasoline taxes of 27.8 cents per gallon.When added to the federal gasoline tax of 18.4 cents per gallon,the total tax on one gallon of gasoline in these two states is 46.2 cents.On December 19,2011,the average price of one gallon of regular gasoline was $3.086 in Kentucky and $3.248 in Montana.Briefly explain whether this is an example of price discrimination.Assume that the gasoline being sold is identical in both states.
Sources: commonsensejunction.com and gasbuddy.com.

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