i need in words not handwritten solution raising the excise tax by $1. You should assume Demand is downwardsloping and Supply is upward sloping.Now add the impact of the increase in cigarette excise taxes of $1.00.Clearly show with an arrow (keeping in mind that the direction of the shiftfor depicting both taxes and subsidies carries a special meaning ineconomics) and explain any shifts in demand and/or supply curves. Labelany shifted curves as D, and/or S. If the curves have not shifted, pleaseexplain why. Graphically depict the new equilibrium price and quantity(labeling it Pa and Q.).At the new equilibrium, please determine how much of the excise taxincrease was borne by cigarette consumers and how much was absorbedby cigarette firms. Indicate the incidence of taxation for both consumersand producers as shown on your graph and explain, defining the conceptand comparing the two.If demand for cigarettes tends to be relatively price-inelastic (steep) andsupply of cigarettes tends to be relatively price elastic (flatter), who willbear higher burden of taxation: consumers or producers or will they bearthe burden equally? Why? You may want to illustrate your response withanother graph, especially if the graph that you've previously drawn doesnot reflect these specific shapes of demand and supply curves. Question 6The September 28, 2021 edition of the Wall Street Journal contained an article titled"Democrats Plan to Tax the Poor" (written by Tom Giovanetti; there is no need for youto review the article). The article stated that the plan would double the federal excise taxon cigarettes from $1 to $2 per pack. Some say this is a version of the so-called "sin tax"which involves using taxes to discourage certain behaviors. Others think it is aimed atmore revenue generation.• Using a graph with quantity on the horizontal axis and price on thevertical axis, show the equilibrium P and Q (labeling it Po and Qo) prior toraising the excise tax by $1. You should assume Demand is downwardsloping and Supply is upward sloping.Now add the impact of the increase in cigarette excise taxes of $1.00

Excise duty is a form of indirect tax that is charged on the goods that are produced within the…

Question 6 The September 28, 2021 edition of the Wall Street Journal contained an article titled "Democrats Plan to Tax the Poor" (written by Tom Giovanetti; there is no need for you to review the article). The article stated that the plan would double the federal excise tax on cigarettes from $1 to $2 per pack. Some say this is a version of the so-called "sin tax" which involves using taxes to discourage certain behaviors. Others think it is aimed at more revenue generation. • Using a graph with quantity on the horizontal axis and price on the vertical axis, show the equilibrium P and Q (labeling it Po and Qo) prior to

Question 6 The September 28, 2021 edition of the Wall Street Journal contained an article titled "Democrats Plan to Tax the Poor" (written by Tom Giovanetti; there is no need for you to review the article). The article stated that the plan would double the federal excise tax on cigarettes from $1 to $2 per pack. Some say this is a version of the so-called "sin tax" which involves using taxes to discourage certain behaviors. Others think it is aimed at more revenue generation. • Using a graph with quantity on the horizontal axis and price on the vertical axis, show the equilibrium P and Q (labeling it Po and Qo) prior to

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 3AQ

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