Two months ago, on July 1, 2019, the State of Illinois raised gasoline taxes by $.19 (19 cents) per gallon of gas.

• Graphically depict the market for Illinois gasolinepriorto the July 2019 increase in gasoline tax.Indicate equilibrium Q and P on the graph.

• Now it is past July 2019 and the market has changed.The gasoline tax is in place for all Illinois gasoline stations.In addition to the gasoline tax increase, Illinois dealers on average are noticing that many of their customers are going across the border to buy gasoline in Wisconsin, Iowa, Missouri and Indiana.Not all customers can go across to other states, as they live far from a border.But there is a clear impact on the market for Illinois gasoline producers.Using the graph you constructed for the above question, build a new graph showing the impact of the Illinois gas tax increaseandthe shift of some Illinois consumers to border state gas stations, clearly indicating any shifts in the demand and/or supply curves and the resulting equilibrium Price and Quantity. Provide a graph and a narrative explaining the shifts.

• Regarding your analysis of above question, what can youunambiguouslysay about the effect of the two events in the above question (increase in Illinois gas tax and some Illinois customers going out of state) on equilibrium quantity and the equilibrium price of gasoline purchased in Illinois?