Assume the government imposes a $0.75 excise tax on the sale of every 2 liter bottle of soda. The tax is to be paid by the producers of soda. The figure below shows the annual market for 2 liter bottles of soda before and after the tax is imposed. Market for Soda Price (per bottle) 4.0 3.5 3.0 2.5 20 1.5 1.0 0.5 0 1 2 3 4 5 6 $₁ Quantity (billions of bottles). S D 7 8 Instructions: Round your answers for price to 2 decimal places. Enter your answers for quantity as a whole number. a. Before the tax is imposed, the equilibrium price is $ per bottle and the equilibrium quantity is b. After the excise tax is imposed, consumers pay a price of $ c. After the excise tax is imposed, the price (or amount) producers keep after the tax is paid is $ d. After the tax. is imposed, the equilibrium quantity is billion bottles. e. The government is able to collect $ per bottle. billion of tax revenue from the tax, per bottle billion bottles.
Assume the government imposes a $0.75 excise tax on the sale of every 2 liter bottle of soda. The tax is to be paid by the producers of soda. The figure below shows the annual market for 2 liter bottles of soda before and after the tax is imposed. Market for Soda Price (per bottle) 4.0 3.5 3.0 2.5 20 1.5 1.0 0.5 0 1 2 3 4 5 6 $₁ Quantity (billions of bottles). S D 7 8 Instructions: Round your answers for price to 2 decimal places. Enter your answers for quantity as a whole number. a. Before the tax is imposed, the equilibrium price is $ per bottle and the equilibrium quantity is b. After the excise tax is imposed, consumers pay a price of $ c. After the excise tax is imposed, the price (or amount) producers keep after the tax is paid is $ d. After the tax. is imposed, the equilibrium quantity is billion bottles. e. The government is able to collect $ per bottle. billion of tax revenue from the tax, per bottle billion bottles.
Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Consumers, Producers, And The Efficiency Of Markets
Section: Chapter Questions
Problem 7PA
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Question
![Assume the government imposes a $0.75 excise tax on the sale of every 2 liter bottle of soda. The tax is to be paid by the producers
of soda. The figure below shows the annual market for 2 liter bottles of soda before and after the tax is imposed.
Price (per bottle)
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
Market for Soda
2
3
1
5
6
S
Quantity (billions of bottles)
S
0
7
8
Instructions: Round your answers for price to 2 decimal places. Enter your answers for quantity as a whole number
a. Before the tax is imposed, the equilibrium price is $
per bottle and the equilibrium quantity is
b. After the excise tax is imposed, consumers pay a price of $
c. After the excise tax is imposed. the price (or amoum) producers keep after the tax is paid is $
d. After the tax is imposed, the equilibrium quantity is
billion bottles.
e. The government is able to collect $
billion of tax revenue from the tax
per bottle
per bottle
billion bottles.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8592f3b3-859c-46ab-b392-3c205ebbc3fb%2F4ed4b4d3-944b-437c-966c-f88258760ef5%2F8m3pmjr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Assume the government imposes a $0.75 excise tax on the sale of every 2 liter bottle of soda. The tax is to be paid by the producers
of soda. The figure below shows the annual market for 2 liter bottles of soda before and after the tax is imposed.
Price (per bottle)
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
Market for Soda
2
3
1
5
6
S
Quantity (billions of bottles)
S
0
7
8
Instructions: Round your answers for price to 2 decimal places. Enter your answers for quantity as a whole number
a. Before the tax is imposed, the equilibrium price is $
per bottle and the equilibrium quantity is
b. After the excise tax is imposed, consumers pay a price of $
c. After the excise tax is imposed. the price (or amoum) producers keep after the tax is paid is $
d. After the tax is imposed, the equilibrium quantity is
billion bottles.
e. The government is able to collect $
billion of tax revenue from the tax
per bottle
per bottle
billion bottles.
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