lawkskæzkp

Show and explain the effect of the tax on Dr. Pepper on: a. Consumers of Dr. Pepper: The potential consumers of Dr. Pepper would probably look for another brand of sugary beverages. So if the price went up, demand would most likely go down, unless Dr. Pepper is a luxury thing to drink, which I don't think it is. b. The producers of Dr. Pepper: The producers would lose a lot of money on it, since demand would probably fall. Their only option would be to come up with a way to brand the Dr. Pepper drink, so people would pay more money for it. Or, they would have to find a cheaper way to produce it, so they could sell it for the same price as other sugary beverages. c. Total welfare in the market for Dr. Pepper If the producers of Dr. Pepper didn't figure out a way to make people want to pay more for it, or somehow produce it cheaper, the welfare in the market for Dr. Pepper would go down. People would buy other brands. d. The government: The government most likely would not gain much from it, since people would just buy other brands of sugary beverages. That's why it would be much more effective for them to put a tax on all the brands, thereby having all the brands be more expensive. If all the brands were more expensive, people would still buy it, since it's a very inelastic product.