Assume the government imposes a $0.75 excise tax on the sale of every 2 liter bottle of soda. The tax is to be paid by the producers of soda. The figure below shows the annual market for 2 liter bottles of soda before and after the tax is imposed. Market for Soda Price (per bottle) 4.0 3.5 3.0 2.5 20 1.5 1.0 0.5 0 1 2 3 4 5 6 $₁ Quantity (billions of bottles). S D 7 8 Instructions: Round your answers for price to 2 decimal places. Enter your answers for quantity as a whole number. a. Before the tax is imposed, the equilibrium price is $ per bottle and the equilibrium quantity is b. After the excise tax is imposed, consumers pay a price of $ c. After the excise tax is imposed, the price (or amount) producers keep after the tax is paid is $ d. After the tax. is imposed, the equilibrium quantity is billion bottles. e. The government is able to collect $ per bottle. billion of tax revenue from the tax, per bottle billion bottles.

Assume the government imposes a $0.75 excise tax on the sale of every 2 liter bottle of soda. The tax is to be paid by the producers of soda. The figure below shows the annual market for 2 liter bottles of soda before and after the tax is imposed. Market for Soda Price (per bottle) 4.0 3.5 3.0 2.5 20 1.5 1.0 0.5 0 1 2 3 4 5 6 $₁ Quantity (billions of bottles). S D 7 8 Instructions: Round your answers for price to 2 decimal places. Enter your answers for quantity as a whole number. a. Before the tax is imposed, the equilibrium price is $ per bottle and the equilibrium quantity is b. After the excise tax is imposed, consumers pay a price of $ c. After the excise tax is imposed, the price (or amount) producers keep after the tax is paid is $ d. After the tax. is imposed, the equilibrium quantity is billion bottles. e. The government is able to collect $ per bottle. billion of tax revenue from the tax, per bottle billion bottles.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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