Essay
The price elasticity of demand for soft drinks has been estimated to be 0.55.If the government enacts a major increase in the tax on imported sugar (a major ingredient in soft drink manufacture), how will that affect total expenditures on soft drinks, all other things equal?
A.Total expenditures will remain unchanged.
B.Total expenditures will fall.
C.Total expenditures will rise.
D.People will buy Pepsi instead of Coke.
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