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>Because plastic is so cheap, producers will pay the tax, continue using plastic, and pass the costs onto consumers.

This is not how it works. To what degree the tax gets "passed on to consumers" is based on relative elasticity of supply and demand in that market, not on the price of the good. You can read about it in absolutely any introductory microeconomics textbook.



Yes, and in that same microeconomics textbook, it will introduce you to monopoly and oligopoly models that show that markets where there are relatively few parties in one side of a bargain generally have more pricing power (and it's rational for them to use it).

Consumers generally have less pricing power than the relatively fewer producers.

Also, in truly commoditized markets where there's a lot of competition, producers aren't making large profits either, a tax increase in the raw materials must eventually be passed on to the consumer, since producers that fail to raise prices will lose money and be forced to exit the market.

So no matter how you slice it, 'not passing on the cost increase' is just not very likely with clothing, it's mostly a question of how long the price adjustment will take since there is some stickiness in consumer preference.




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