1. Suppose that your town decides to impose a tax on 2-liter boles of soda to encourage healthier dietary habits. Before the tax, the supply and demand sedules for boles of soda are given in the table below.

a. Draw a supply-and-demand graph illustrating the market before the tax. What is the equilibrium price and quantity for boles of soda?

b. e town then imposes a tax of $0.20 per bole. Illustrate this on your graph. What is the new equilibrium price and quantity for boles of soda?

c. How mu in taxes will the local government collect?

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Price per bottle Quantity supplied per month Quantity demanded per month $1.00 16,000 20,000 $1.10 17,000 19,000 $1.20 18,000 18,000 $1.30 19,000 17,000 $1.40 20,000 16,000 $1.50 21,000 15,000