In Lungtopia, cigarettes sell for $5 per pack, and 5,000 packs are sold every week. In an effort to raise government revenue, the mayor of the city decides to impose a $2 per pack tax on cigarettes. 1.) Using the line drawing tool, show the approximate effect of the tax on the market supply curve for cigarettes. Properly label your line. 2.) Using the point drawing tool, indicate the new equilibrium price and quantity. Label your point E1. Carefully follow the instructions above, and only draw the required objects.
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In Lungtopia, cigarettes sell for $5 per pack, and 5,000 packs are sold every week. In an effort to...
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