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The government is considering levying a tax of $100 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of

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The government is considering levying a tax of $100 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by DL (on the first graph), and the demand for smartphones is shown by Ds (on the second graph). Suppose the government taxes leather jackets. The following graph shows the annual supply and demand for this good. It also shows the supply curve (S + Tax) shifted up by the amount of the proposed tax ($100 per jacket). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for leather jackets. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. (?) Leather Jackets Market 240 Supply S+Tax Tax Revenue Deadweight Loss PRICE (Dollars per jacket) 0 8 5 8 8 8 8 6 8 8 8 50 100 150 200 250 300 350 400 450 500 550

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