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edehghany edehghany
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Short description: A graph plots bottles of soft drinks per day against price in dollars. Long description: The horizontal axis representing bottles of soft drinks per day ranges from 100 to 1200, in increments of 100. The vertical axis representing price in dollars ranges from 0.20 to 3.00, in increments of 0.20. The graph plots three lines. A decreasing line, D passes through the following points: (400, 3.20), (600, 2.80), (800, 2.40), (1000, 2.00), and (1200, 1.60). An increasing line, S passes through the following points: (100, 1.00), (300, 1.30), (500, 1.50), (700, 1.70), (900, 1.90), (1000, 2.00), and (1200, 2.20). A dashed increasing line, S prime passes through the following points: (100, 1.70), (300, 1.90), (500, 2.10), (700, 2.30), (800, 2.40), (900, 2.50), and (1200, 2.80). The lines, D and S intersect at (1000, 2.0). The lines, D and S prime intersect at (800, 2.40). Vertical and horizontal dashed lines are extended from the point to the axes. The difference between the two points is marked t equals 0.60. Note: All values are approximated.

FIGURE 4-4

Refer to Figure 4-4. 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. Suppose the government imposes a tax of $0.60 per soft drink purchased. Which of the following statements most accurately describes the economic incidence of this tax?



▸ The seller bears more of the burden because supply is inelastic relative to demand.

▸ The consumer bears more of the burden because demand is inelastic relative to supply.

▸ The consumer bears more of the burden because demand is elastic relative to supply.

▸ The seller bears more of the burden because supply is elastic relative to demand.

▸ The burden is shared equally between consumer and seller because the slopes of the supply and demand curves are the same.
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Microeconomics

Microeconomics


Edition: 17th
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maoginmaogin
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edehghany Author
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2 years ago
Correct Slight Smile TY
gefa
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Smart ... Thanks!
Starfiew
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2 hours ago
this is exactly what I needed
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