2) Explain how a government intervention (such as a permit fee from your simulation) can affect supply and demand equilibrium. Use evidence from your simulation, if available. If not, you can use appropriate material from the text. Government involvement can really affect supply and demand negatively or positively. Like if the government increase tax on producers they may produce less resulting on reduce in supply because it's going to cost them more but if they tax us the consumers the product's price may increase and making us the buyers think twice about buying which will reduce demand. Like tax, the government also has subsidies, discount to make things cheaper. As shown in A Unit Price Cost Personal Nuisance Payoff (per unit) 1 $3.90 $1.70 $0.13 $2.07 2 $3.94 $3.33 $0.13 Total Nuisance caused by others $0.48 -$0.93 Total End of Game $1.62 |12 Unit Price Cost Personal Nuisance Tax Payoff (per unit) 1 $4.72 $2.00 $0.13 $1.33 $1.25 2 $3.40 $3.63 $10 $0.13 $1.33 Total Nuisanco caused by others Total End of Game -$1.70 $0.00 | 00:00 | -$0.45 12 | 00:00 | the simulation