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Using a Supply and Demand Graph,illustrate the Effect of an Increase

question 29

Essay

Using a supply and demand graph,illustrate the effect of an increase in the federal cigarette tax of $1.00 per pack,where the entire tax burden falls on the consumer.Assume the equilibrium price before the tax is $5.00 per pack and the equilibrium quantity is 30 million packs.
After the implementation of the tax,what are the equilibrium price and equilibrium quantity?


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