The tax is to be paid by the producers of soda

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Reference no: EM13999280

The government imposes a $1.10 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.

a. Before the tax is imposed, the equilibrium price is $_______ per bottle and the equilibrium quantity is _______ billion bottles.

b. After the excise tax is imposed, consumers pay a price of $_______ per bottle.

c. After the excise tax is imposed, the price (amount) producers keep after the tax is paid is $______ per bottle.

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.

Reference no: EM13999280

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