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1. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 15 billion cases of cola
1. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 15 billion cases of cola were sold every year at a price of $7 per case. After the tax, 10 billion cases of cola are sold every year; consumers pay $9 per case (including the tax), and producers receive $6 per case. per case. Of this amount, the burden that falls on consumers is S per case, and the per case. The amount of the tax on a case of cola is $ burden that falls on producers is S True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. True O False
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