Question
The government recently imposed an excise tax of$2 per session on tanning salons. E0 represents the initial equilibrium before the excise tax. Determine the effect
The government recently imposed an excise tax of$2 per session on tanning salons. E0 represents the initial equilibrium before the excise tax.
Determine the effect of the excise tax on the market for tanning sessions.
1.) Using the line drawing tool, draw either a new supply or demand curve that illustrates the imposition of the tax. Properly label your line.
2.) Using the point drawing tool, plot the new equilibrium point. Label the point 'E2'.
Carefully follow the instructionsabove, and only draw the required objects.
When I got the first try wrong, this is the message that popped up: "The tax would cause the supply line to shift to the left. This increases the price per tanning session and decreases the equilibrium level of tanning sessions sold."
I need help graphing the new supply and demand line and equilibrium point.
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