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CO201 Homework (Ch 08) 4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue
CO201 Homework (Ch 08) 4. 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 cigarettes, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Cigarettes & Supply Quantity (Packs) Demand Price 12.00 Supply Price CO (Dollars per pack) (Dollars per pack) Tax 4.00 (Dollars per pack) PRICE (Dollars per pack) 0 12 24 36 48 60 72 84 96 108 120 QUANTITY (Packs) MacBook Air 44 DO 868 FA
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