5) There have been proposals that a tax be imposed on sugar-laden soft drinks in an attempt to reduce their consumption. Assume for simplicity that all bottled soft drinks are the same size. Suppose the initial market equilibrium is P = $2.00 and Q = 1000. (see figure 2 below)   a) Refer to Figure 2. Suppose the government imposes a tax of $0.60 per soft drink purchased. The price paid by the consumer becomes =    b)  Refer to Figure 2.  Suppose the government imposes a tax of $0.60 per soft drink purchased. The after-tax price received by the seller becomes =   c) Refer to Figure 2. Suppose the government imposes a tax of $0.60 per soft drink purchased. The government total tax revenue from sales of soft drinks is =

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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5) There have been proposals that a tax be imposed on sugar-laden soft drinks in an attempt to reduce their consumption. Assume for simplicity that all bottled soft drinks are the same size. Suppose the initial market equilibrium is P = $2.00 and Q = 1000. (see figure 2 below)

 

a) Refer to Figure 2. Suppose the government imposes a tax of $0.60 per soft drink purchased. The price paid by the consumer becomes = 

 

b)  Refer to Figure 2.  Suppose the government imposes a tax of $0.60 per soft drink purchased. The after-tax price received by the seller becomes =

 

c) Refer to Figure 2. Suppose the government imposes a tax of $0.60 per soft drink purchased. The government total tax revenue from sales of soft drinks is = 

3.00
S'
2.80
2.60
2.40
S
t=0.60
2.20
2.00
1.80
1.60
1.40
1.20
D
1.00
.80
.60
.40
.20
++
+
100 200
300 400 500 600 700 800 900 1000 1100 1200
Bottles of Soft Drinks per Day
Price ($)
Transcribed Image Text:3.00 S' 2.80 2.60 2.40 S t=0.60 2.20 2.00 1.80 1.60 1.40 1.20 D 1.00 .80 .60 .40 .20 ++ + 100 200 300 400 500 600 700 800 900 1000 1100 1200 Bottles of Soft Drinks per Day Price ($)
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