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here is evidence that consuming high quantities of refined sugar is bad for health. To promote health, suppose the Iowa legislature is considering imposing a

here is evidence that consuming high quantities of refined sugar is bad for health. To promote health, suppose the Iowa legislature is considering imposing a tax on soda (which is high in sugar). You can think of a tax as an increase in the marginal costs for producers of soda. The goal of the tax is to decrease consumption of soda. The Iowa lesgislature asks for your economic analysis. You reply: the tax will NOT be effective at reducing soda consumption if Choice 1 of 4:a) Demand for soda is low to begin with Choice 2 of 4:b) Demand for soda is high to begin with Choice 3 of 4:c) Demand for soda is elastic Choice 4 of 4:d) Demand for soda is inelastic

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