11. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for gin. With no tax, the equilibrium quantity is 100 bottles. The following table shows the equilibrium quantity produced and sold in the market for various per unit taxes. Tax (Dollars per bottle) 0 Quantity (Botties) 100 20 80 40 60 50 50 60 40 80 20 100 0 Suppose the government imposes a $20-per-bottle tax on suppliers. in tax revenue bottles, and the government collects At this tax amount, the equilibrium quantity of gin is Now calculate the government's tax revenue if it sets a tax of $0, $20, $40, $50, $60, $80, or $100 per bottle. Using the data you generate, plot Laffer curve by using the green points (triangle symbol) to plot total tax revenue at each of those tax levels. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically Her wurve by using the green points (triangle symbol) to plot total tax revenue at each of those tax levels. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 100 30 80 Laffer Curve 70 80 TAX RATE (Dollars per bottle) se 40 30 S of 20 10 0 250 750 1000 1250 1.500 1750 2000 2000 2500 TAX REVENUE (Dollars) Suppose the government is currently imposing a $60-per-bottle tax on gin. True or False: The government can raise its tax revenue by increasing the per-unit tax on gin. True False