Mayor: "I am proposing an increased tax on sugary soft drinks, which would lead to decreased consumption of such soft drinks, and provide much needed revenue to the city. Surveys indicate that consumption of sugary sodas would drop if the price were raised, showing that I have found a way to make our city healthier and also raise revenue."
Which of the following is an assumption made by the mayor's argument?
A)People are motivated by taste less than price when choosing a soft drink.
B)The expected drop in sales due to the tax would not cause the tax revenue to decrease in comparison to its current level.
C)Sugary soft drinks are a popular drink among the city's youth.
D)The city is in desperate need of increased revenue.
E)The tax increase will not cause an undue burden on poor households in the city.

Question

Quizplus · Accepted Answer

The mayor's argument assumes that the expected drop in sales due to the tax will not cause the tax revenue to decrease in comparison to its current level. The mayor claims he has found a way to make the city healthier AND raise revenue. However, revenue cannot go up if the sales decline so much due to the tax that there is no revenue from the taxes.

Mayor: "I Am Proposing an Increased Tax on Sugary Soft