Decides to charge cola consumers a tax

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Reference no: EM13740115

Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 25,000 cases of cola were sold every week at a price of $7 per case. After the tax, 18,000 cases of cola are sold every week; consumers pay $8 per case (including the tax), and producers receive $5 per case.

The amount of the tax on a case of cola is $____________per case. Of this amount, the burden that falls on consumers is $__________per case, and the burden that falls on producers is $_________per case.

Reference no: EM13740115

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