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Glossary
Knowledge Check - Scenario 3

For the following scenario in the soft drinks market, answer the related question using the graphs below.


Scenario 3: The government tries to battle obesity by taxing the production of soft drinks.

1. Based on Scenario 3, which graph illustrates the change in the soft drinks market?

Graph 1

Graph 2

Graph 3

Graph 4

2. Based on Secenario 3, the supply curve for soft drinks

shifts to the right.

shifts to the left.

does not shift.

3. Based on Scenario 3, the demand curve for soft drinks

shifts to the right.

shifts to the left.

does not shift.

4. Based on Scenario 3, the equilibrium price of soft drinks

increases.

decreases.

5. Based on Scenario 3, the equilibrium quantity of soft drinks

increases.

decreases.