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6. An analysis of these graphs, and an understanding of the economic theory behind them, indicate that the stiff tax on imports of ethanol the
6. An analysis of these graphs, and an understanding of the economic theory behind them, indicate that the stiff tax on imports of ethanol the total supply of ethanol in the U.S. market. [Your answer should be "increased" or "decreased," but not both.]The seoond federal control of the ethanol market mentioned by the authors of our textbook is the institution of a heavy tax on imporE of ethanol. The threepart graph below shows the effecE of the tariff on ethanol in the U.S. market, the thick arrows showing the direction of movement. caused by the tariff. I The panel on the left shows the foreign supply of ethanol, mostly from Brazil. I The panel in the middle shows the domestic supply of ethanol. I The panel on the right shows the total supply {both foreign and domestic], and the demand for Ethanol. This panel is basically a summation of the foreign supply and the domestic supply, with the addition of the demand for ethanol. $/Q S't St Sd St $/Q D Qi Q Q Q Qd Qd
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