Suppose that a city government introduces a $0.50 excise (commodity) tax on consumers of bottles of soda to improve the health of its citizens. Manipulate the accompanying graph to demonstrate the impact of the tax on the market for soda Market for Bottles of Soda 5.0 4.5 4.0 What would be the new equilibrium quantity if instead of taxing consumers, the city taxed producers? 3.5 3.0 2.5 thousand bottle:s 2.0 0.5 0.0 0 2 34 Quantity (thousands of bottles) 5 8 9 10

Question
Suppose that a city government introduces a $0.50 excise
(commodity) tax on consumers of bottles of soda to improve
the health of its citizens. Manipulate the accompanying
graph to demonstrate the impact of the tax on the market for
soda
Market for Bottles of Soda
5.0
4.5
4.0
What would be the new equilibrium quantity if instead of
taxing consumers, the city taxed producers?
3.5
3.0
2.5
thousand bottle:s
2.0
0.5
0.0
0
2 34
Quantity (thousands of bottles)
5
8 9 10

Image Transcription

Suppose that a city government introduces a $0.50 excise (commodity) tax on consumers of bottles of soda to improve the health of its citizens. Manipulate the accompanying graph to demonstrate the impact of the tax on the market for soda Market for Bottles of Soda 5.0 4.5 4.0 What would be the new equilibrium quantity if instead of taxing consumers, the city taxed producers? 3.5 3.0 2.5 thousand bottle:s 2.0 0.5 0.0 0 2 34 Quantity (thousands of bottles) 5 8 9 10

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