Skip to content
We use only essential cookies to keep you signed in and remember your preferences. See our Cookie Policy.
TestStop
MocksPracticeResourcesIndiaBlogPricing
Sign in
Questions › DSE › DSE 2009 › Q12
1 markPublic Economics › Taxation: incidence and efficiency › Tax incidenceModerateabout 3 min

DSE 2009 Question 12: Taxation: incidence and efficiency

The demand function for lemonade is Qd=100−pQ_{d}=100-pQd​=100−p, and the supply function is Qs=10+2pQ_{s}=10+2pQs​=10+2p, where ppp is the price in rupees. The government levies a sales tax on lemonade after which the volume of sales drops to 60. Then the per unit tax on lemonade is

Tap an option to check your answer.

Answer and worked solution

Checking your account…

Plain-text version

The demand function for lemonade is Q_d=100-p, and the supply function is Qₛ=10+2p, where p is the price in rupees. The government levies a sales tax on lemonade after which the volume of sales drops to 60. Then the per unit tax on lemonade is (A) Rs. 20 (B) Rs. 15 (C) Rs. 10 (D) Rs. 5

Also written as: The demand function for lemonade is Q_d=100-p, and the supply function is Q_s=10+2p, where p is the price in rupees. The government levies a sales tax on lemonade after which the volume of sales drops to 60. Then the per unit tax on lemonade is

Taxation: incidence and efficiency has come up 79 times in 7 exams since 2009.

What this question tests

This question is on Tax incidence, part of Taxation: incidence and efficiency in Public Economics.

Who actually bears a tax, whoever the law makes pay.

TestStop has 26 past-paper questions on this subtopic.

Practise Taxation: incidence and efficiencyMore on Tax incidence

Similar questions from other papers

  • CUET-PG 2026 · Q50Sequence the evolution of taxation principles in modern Economics. A. Ability to pay principle B. Benefit principle C. Optimal taxation theory D. Equity and efficiency…
  • IIT JAM 2026 · Q8The relationship between tax revenue and tax rate is represented by.
  • UGC-NET 2026 · Q43When product tax is imposed as a percentage of price it is referred as?
  • IIT JAM 2025 · Q28Tax buoyancy is defined as.
  • UGC-NET 2025 · Q12When public revenue increases by more than 1% for a 1% increase in GDP, it is known as:

Question from the DSE 2009 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.