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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