in a free market economy, the consumption of cold drinks like cola can be reduced by?
a) complete ban b) imposing tax c) rationing d) counselling through schools
Hey Nisha,
In a free market economy, the consumption of cold drinks like cola can be reduced by imposing a tax on it. When the government levied a tax on sellers then supply curve shifts leftwards (by the amount of tax) from S1S1 to S2S2. As a result price increases from P1 to P2 and quantity demanded reduces from Q1 to Q2.
In a free market economy, the consumption of cold drinks like cola can be reduced by imposing a tax on it. When the government levied a tax on sellers then supply curve shifts leftwards (by the amount of tax) from S1S1 to S2S2. As a result price increases from P1 to P2 and quantity demanded reduces from Q1 to Q2.