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The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government
The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. A graph plots supply and demand for blinkies with price in dollars per blinkie on the y-axis and quantity of blinkies on the x-axis. The demand curve is a straight line with y-intercept (0, $80) and the supply curve is a straight line with y-intercept (0, $16). The curves intersect at (40, $48.00), and a black plus symbol denotes the intersection. There are two grey star symbols, one along the demand curve at (30, $56.00) and one along the supply curve at (30, $40.00). A triangular area shaded green labeled A is defined by (0, $80), (30, $56.00), and (0, $56.00). A square shaded brown labeled B is defined by (30, $56.00), (0, $56.00), (0, $48.00), and (30, 48.00). A triangle shaded grey labeled C is defined by (30, $56.00), (30, $48.00), and (40, $48.00). A square shaded brown labeled D is defined by (0, $48.00), (30, 48.00), (30, $40.00), and (0, $40.00). A triangle shaded
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