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Author Question: FIGURE 4-4Refer to Figure 4-4. There have been proposals that a tax be imposed on sugar-laden soft ... (Read 74 times)

ddddddddddeeee4444

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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. Given the change in total expenditure on soft drinks after imposition of the excise tax, what do we know about the price elasticity of demand (η) for soft drinks?


◦ η is equal to 0
◦ η is equal to 1
◦ η is less than 1
◦ η is greater than 1
◦ There is not enough information to determine.


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Marked as best answer by ddddddddddeeee4444 on Oct 12, 2022

zubair1583

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ddddddddddeeee4444

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Reply 2 on: Oct 12, 2022
Great answer, keep it coming :)


jackie

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Reply 3 on: Yesterday
Gracias!

 

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