Assume that sugar-based soft drinks are produced in a market shown on the graph above. Answer the following questions based on the information given in the graph.
Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and
Assume that sugar-based soft drinks are produced in a market shown on the graph above. Answer the following questions based on the information given in the graph.
(a) To reduce the consumption of sugary soft drinks, suppose the government imposes a $2 per-unit sales tax on soft drinks.
(i) Will the
(ii) Calculate the tax revenue the government can collect from the sale of soft drinks. Show your work.
(iii) Will the
(iv) Calculate the
(b) Suppose that instead of imposing the per-unit sales tax, the government sets a
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(ii) Calculate the tax revenue the government can collect from the sale of soft drinks. Show your work.
(iii) Will the
(iv) Calculate the
(b) Suppose that instead of imposing the per-unit sales tax, the government sets a
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