Tax be affected by the elasticities of demand and supply

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Lately, Congress has been debating introducing a tax on sugary drinks like sodas as a way to combat obesity. a. Suppose a $1.00 per liter tax is introduced on all sodas made with sugar or high fructose corn syrup. Draw a supply-demand diagram indicating what would happen to the equilibrium price & quantity after the tax is introduced. Indicate the deadweight loss & explain what it means in one sentence. b. How would the impact of the tax be affected by the elasticities of demand & supply? In what case would the tax be best at fighting obesity? In what case would it be the most efficient?

Reference no: EM131090259

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