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There is currently a thriving, unregulated market in smartphone protective cases. A typical case sells for around $500. The government decides to tax consumers of

There is currently a thriving, unregulated market in smartphone protective cases. A typical case sells for around $500. The government decides to tax consumers of this product by imposing a $100 tax. How is this proposed tax going to affect the market for smartphone cases – that is, how will it affect the price of the cases and the amount of cases that are sold? Considering that the government will earn revenue, overall, do you think that the society benefits from such a move?

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