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and this tutorial Im talking about excise tax who pays taxes and how much Im going to draw in a supply and demand curve equilibrium is a gray dot and price is 8 and quantity is 6 Im going to change the elasticity of demand and show you how revenue changes depending on the elasticity of demand and Ill do that at several different points or different levels of elasticity imagine I set the tacks of three what I do is I take my taxi and add it to my supply curve so the entire supply curve shifts up like that this would be an example of a retail tax on like on gasoline or cigarettes I have a new equilibrium point at the Green Dot and quantity is 4 in price is 9 but what happens is the producer only gets six dollars or six a consumer pays nine and a producer gets six government collects a tax of $3 per unit sold quantity has decreased from six to four and prices have gone up from eight to nine it turns out total tax revenues can be defined as that green rectangle and it happens to be tw
