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 after-tax price received by the seller becomes
A)$1.80.
B)$2.00.
C)$2.20.
D)$2.40.
E)$2.60.

Question

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 after-tax price received by the seller becomes
A)$1.80. 
B)$2.00. 
C)$2.20. 
D)$2.40. 
E)$2.60.

Quizplus · Accepted Answer

The tax of $0.60 is added to the original price of $1.80, resulting in an after-tax price of $1.80 + $0.60 = $2.40.

There Have Been Proposals That a Tax Be Imposed on Sugar-Laden