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Suppose the Equilibrium Price and Quantity of a 12-Pack of Dr.Pepper

question 163

Essay

Suppose the equilibrium price and quantity of a 12-pack of Dr.Pepper are $5.00 and 10,000 12-packs, respectively, and the government decides to impose a $1.00 tax on every 12-pack of carbonated soft drinks.Draw two supply and demand graphs, one showing the excess burden of the tax when supply is less elastic and the other showing the excess burden of the tax when supply is more elastic.Identify the excess burden of the tax on each graph.On which graph is the excess burden the greatest?


Definitions:

Operands

The entities on which operators perform operations in expressions, such as variables or values.

Period

A length or span of time characterized by a specific condition, activity, or event.

Terminate

To bring an activity, process, or operation to an end; in computing, it often refers to stopping a program or process.

Cast Operator

A symbol or method in programming used to convert a variable from one data type to another.

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