Suppose the market for soft drinks is given by: Demand: P = 181 - 1.7Q Supply: P = 1.3Q The government wants to discourage unhealthy eating habits and so imposes a tax that reduces the market equilibrium quantity by 11. How much of the tax revenue generated was previously captured by producers at equilibrium?
Suppose the market for soft drinks is given by: Demand: P = 181 - 1.7Q Supply: P = 1.3Q The government wants to discourage unhealthy eating habits and so imposes a tax that reduces the market equilibrium quantity by 11. How much of the tax revenue generated was previously captured by producers at equilibrium?
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
Problem 10PA
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![Suppose the market for soft drinks is given by:
Demand: P = = 181 - 1.7Q
Supply: P = 1.3Q
The government wants to discourage unhealthy eating habits and so
imposes a tax that reduces the market equilibrium quantity by 11. How
much of the tax revenue generated was previously captured by
producers at equilibrium?
a. $314.60
b. $170.00
c. $705.47
d. $117.97](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe795797d-e6dc-47b4-b18d-16e99e979c80%2F81949eca-e607-40f7-bee4-fcb0e47d8ee7%2Fqiowxzf_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose the market for soft drinks is given by:
Demand: P = = 181 - 1.7Q
Supply: P = 1.3Q
The government wants to discourage unhealthy eating habits and so
imposes a tax that reduces the market equilibrium quantity by 11. How
much of the tax revenue generated was previously captured by
producers at equilibrium?
a. $314.60
b. $170.00
c. $705.47
d. $117.97
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