Suppose the market for soft drinks is given by: Demand: P=181-1.7Q Supply:P=1.30 The government wants to discourage unhealthy eating habits and so imposes a tax that reduces the market equilibrium quantity by 11. How much of the tax revenue generated was previously captured by producers at equilibrium? Oa. $314.60 O b. $170.00 O c. $705.47 Od. $117.97

Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Design Of The Tax System
Section: Chapter Questions
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Suppose the market for soft drinks is given by:
Demand: P=181-1.70
Supply: P=1.30
The government wants to discourage unhealthy eating habits and so
imposes a tax that reduces the market equilibrium quantity by 11. How
much of the tax revenue generated was previously captured by
producers at equilibrium?
O a. $314.60
O b. $170.00
Oc. $705.47
O d. $117.97
Transcribed Image Text:Suppose the market for soft drinks is given by: Demand: P=181-1.70 Supply: P=1.30 The government wants to discourage unhealthy eating habits and so imposes a tax that reduces the market equilibrium quantity by 11. How much of the tax revenue generated was previously captured by producers at equilibrium? O a. $314.60 O b. $170.00 Oc. $705.47 O d. $117.97
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