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Suppose a Tax Is Imposed on Energy Drinks That Have

Question 88

Multiple Choice

Suppose a tax is imposed on energy drinks that have a price elasticity of demand equal to 2,and a price elasticity of supply equal to 1.We would expect that


A) the producers of energy drinks containing sugar would pay a larger portion of the tax.
B) the consumer would pay a larger portion of the tax.
C) the consumer would pay the entire tax.
D) the producers of energy drinks containing sugar would pay the entire tax.

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