There Have Been Proposals That a Tax Be Imposed on Sugar-Laden

question 30

Multiple Choice

There have been proposals that a tax be imposed on sugar-laden soft drinks in an attempt to reduce their consumption.Assume for simplicity that all bottled soft drinks are the same size.Suppose the initial market equilibrium is P = $2.00 and Q = 1000. FIGURE 4-4
-Refer to Figure 4-4.Suppose the government imposes a tax of $0.60 per soft drink purchased.The price paid by the consumer becomes

• A)$1.80.
• B)$2.00.
• C)$2.20.
• D)$2.40.
• E)$2.60.

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Definitions:

Stockholders' Equity

The remaining value of a company's assets after all its debts have been paid, commonly known as shareholders' equity.

Prepayments

Payments made in advance for goods or services that will be received in the future, often recorded as assets on a balance sheet.

Revenue Recognition

The accounting principle that dictates the specific conditions under which revenue is recognized or accounted for.

Intangible Assets

Non-physical assets possessing value such as patents, copyrights, trademarks, and goodwill.