Suppose that the local government of Columbus decides to institute a tax on soda producers. Before the tax, 30 million liters of soda were sold everymonth at a price of $9 per liter. After the tax, 23 million liters of soda are sold every month; consumers pay $14 per liter, and producers receive $6per liter (after paying the tax).The amount of the tax on a liter of soda is $that falls on producers is $per liter.True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers.Trueper liter. Of this amount, the burden that falls on consumers is $Falseper liter, and the burden

An excise tax is applied on each unit of a commodity. As a result buyers have to pay higher prices…

uppose that the local government of Columbus decides to institute a tax on soda producers. Before the tax, 30 million liters of soda were sold every onth at a price of $9 per liter. After the tax, 23 million liters of soda are sold every month; consumers pay $14 per liter, and producers receive $6 er liter (after paying the tax). he amount of the tax on a liter of soda is $ at falls on producers is $ per liter. ue or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. O True per liter. Of this amount, the burden that falls on consumers is $ O False per liter, and the burden

uppose that the local government of Columbus decides to institute a tax on soda producers. Before the tax, 30 million liters of soda were sold every onth at a price of $9 per liter. After the tax, 23 million liters of soda are sold every month; consumers pay $14 per liter, and producers receive $6 er liter (after paying the tax). he amount of the tax on a liter of soda is $ at falls on producers is $ per liter. ue or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. O True per liter. Of this amount, the burden that falls on consumers is $ O False per liter, and the burden

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Price (dollars per gallon) S2 $5.50 3.50 2.50 D Quantity (millions of gallons per month) 30 40 45 Assume the graph above illustrates a new tax put into the market for soft drinks. S2 is the supply curve with the $2 tax in place. What price would consumers pay if the tax was placed on consumers instead of producers? 1) $2.00 O 2) $3.50 3) $2.50 4) $1.50