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:

Question
Asked Oct 10, 2019
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Suppose the Canadian government has decided to place an
excise tax of $20 per tire on producers of automobile tires
Excise taxes are also called sales or commodity taxes
150
Previously, there was no excise tax on automobile tires. As
140
a result of the excise tax, producers of tires, such as
130
Bridgestone and Michelin, are going to alter their
tire prices
The graph illustrates the demand and supply curves for
120
Supply
Demand
110
100
automobile tires before the excise tax.
90
Please shift the appropriate curve or curves on the graph to
demonstrate the new equilibrium
80
70
What is the price consumers pay for a tire post tax? Round
60
to the nearest 10
50
0
2
4
5
6
7
8
9
10
Quantity of tires
100
price paid by
consumers:
Price per tire
co
help_outline

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Suppose the Canadian government has decided to place an excise tax of $20 per tire on producers of automobile tires Excise taxes are also called sales or commodity taxes 150 Previously, there was no excise tax on automobile tires. As 140 a result of the excise tax, producers of tires, such as 130 Bridgestone and Michelin, are going to alter their tire prices The graph illustrates the demand and supply curves for 120 Supply Demand 110 100 automobile tires before the excise tax. 90 Please shift the appropriate curve or curves on the graph to demonstrate the new equilibrium 80 70 What is the price consumers pay for a tire post tax? Round 60 to the nearest 10 50 0 2 4 5 6 7 8 9 10 Quantity of tires 100 price paid by consumers: Price per tire co

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What is the price producers receive for a tire net of taxes?
Round to the nearest 10
50
price received by producers:
help_outline

Image Transcriptionclose

What is the price producers receive for a tire net of taxes? Round to the nearest 10 50 price received by producers:

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Expert Answer

Step 1

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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