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 $ per bottle. 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 $ billion of tax revenue from the tax, per bottle billion bottles.

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 $ per bottle. 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 $ 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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Question

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.
Price (per bottle)
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
Market for Soda
2
3
1
5
6
S
Quantity (billions of bottles)
S
0
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 quamtity is
billion bottles.
e. The government is able to collect $
billion of tax revenue from the tax
per bottle
per bottle
billion bottles.

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