A new indirect tax is charged on each bottle of fruit juice. Assuming other influences on the market are unchanged, the table shows the average price and quantity sold before and after the tax was introduced.
| Average price per bottle | Quantity sold per week | |
|---|---|---|
| Before the tax | £1.20 | 10.0 million bottles |
| After the tax | £1.35 | 9.0 million bottles |
Using the data, explain how the indirect tax is likely to have affected the market for fruit juice.
76 exam-style questions on OCR GCSE Economics 3.5 Fiscal policy, covering 3.5.1 Government spending and revenue, 3.5.2 Budget balance, surplus and deficit, 3.5.3 What is fiscal policy, 3.5.4 Calculate effects of taxes and spending, 3.5.5 Analyse effects of taxes and spending, 3.5.6 Costs and benefits of fiscal policy, and 3.5.7 Redistributing income and wealth. Each one has a worked solution and a mark scheme showing where the marks go.