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 is the price sellers receive after the tax? 1) $1.50 2) $2.50 3) $3.00 4) $3.50

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 is the price sellers receive after the tax? 1) $1.50 2) $2.50 3) $3.00 4) $3.50

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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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 is the price sellers receive after the tax?
1) $1.50
2) $2.50
gallons per month)
3) $3.00
4) $3.50
71″E
230 PM
130
O

Price
(dollars
per gallon)
$5.50
3.50
2.50
0
30 40 45
D
S2
S₁
Quantity
(millions of
gallons per month)

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