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1.2.9 Indirect taxes and subsidies

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Question 12

The specific indirect tax on sugary soft drinks is increased in a market where the price elasticity of demand is -0.2. Which one of the following is the most likely effect on consumer surplus and producer surplus?

A

Consumer surplus and producer surplus both decrease

B

Consumer surplus and producer surplus both increase

C

Consumer surplus decreases and producer surplus increases

D

Consumer surplus increases and producer surplus decreases

Markscheme

1.2.9 Indirect taxes and subsidies Questions

  1. A Level
  2. /Economics
  3. /1.2.9 Indirect taxes and subsidies

22 exam-style questions on Edexcel A A Level Economics 1.2.9 Indirect taxes and subsidies. Each one has a worked solution and a mark scheme showing where the marks go.

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