Question
Asked Oct 16, 2019
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Refer to Figure 2. It shows the imposition of a per-unit tax on the market for cigarettes. S = Market Supply Curve; D = Market Demand Curve; S+Tax = Market Supply Curve with per-unit tax imposed. The total tax collected can be represented by:

A) Triangle ABF
B) Rectangle PTax
C) Rectangle PTaxECA
D) Rectangle P0 ECB

estion 1/
Figure 2
Market for Cigarettes
S Tax
P
P
E
P
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estion 1/ Figure 2 Market for Cigarettes S Tax P P E P

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Expert Answer

Step 1

New supply curve with tax increases the equilibrium price to PTAX. The new price consumer pays - PTAX and the producer will now receive Price - E. Therefore, rest i...

Market for Cigarettes
S Tax
P
p
E
D
help_outline

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Market for Cigarettes S Tax P p E D

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Supply and Demand

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