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23 February, 15:51

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

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  1. 23 February, 19:13
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    The 20-cent tax would shift the demand curve to the left and the supply curve to increase the equilibrium price but the quantity demanded low as the price has been increased due to increased tax which is now included in the cost of the product. Since the product is not an inelastic product, the increase in the price would lead to the reduction in quantity demanded by the people as they would switch towards substitutes or could just simply reduce their consumption towards the artificially sweetened beverages.

    Hope this clear things up.

    Good luck and cheers.
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