# Suppose the Canadian government has decided to place anexcise tax of \$20 per tire on producers of automobile tiresExcise taxes are also called sales or commodity taxes150Previously, there was no excise tax on automobile tires. As140a result of the excise tax, producers of tires, such as130Bridgestone and Michelin, are going to alter theirtire pricesThe graph illustrates the demand and supply curves for120SupplyDemand110100automobile tires before the excise tax.90Please shift the appropriate curve or curves on the graph todemonstrate the new equilibrium8070What is the price consumers pay for a tire post tax? Round60to the nearest 10500245678910Quantity of tires100price paid byconsumers:Price per tireco What is the price producers receive for a tire net of taxes?Round to the nearest 1050price received by producers:

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The initial equilibrium is at e where S=D and the Price= \$90 and quantity= 40 units. Due to the imposition of excise tax of \$20, the supply curve shifts upwards to S1 and now the equilibrium price is \$...

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