Suppose that a city government introduces a $0.50 excise (commodity) tax on consumers of bottles of soda to improve the health of its citizens. Manipulate the accompanying graph to demonstrate the impact of the tax on the market for soda What would be the new equilibrium quantity if instead of taxing consumers, the city taxed producers? 2 O thousand bottles Price ($/bottle) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0 1 Market for Bottles of Soda 3 4 5 6 7 Quantity (thousands of bottles) 2 8 9 8 10

Suppose that a city government introduces a $0.50 excise (commodity) tax on consumers of bottles of soda to improve the health of its citizens. Manipulate the accompanying graph to demonstrate the impact of the tax on the market for soda What would be the new equilibrium quantity if instead of taxing consumers, the city taxed producers? 2 O thousand bottles Price ($/bottle) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0 1 Market for Bottles of Soda 3 4 5 6 7 Quantity (thousands of bottles) 2 8 9 8 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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