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This tutorial discusses excise taxes, who pays them, and how they impact supply and demand. Using a supply and demand curve, the equilibrium point is shown with a price of 8 and quantity of 6. Changing the elasticity of demand affects revenue, with examples of how a tax of three shifts the supply curve up. This results in a new equilibrium point at a price of 9 and quantity of 4. The producer receives $6, consumers pay $9, and the government collects $3 per unit sold. Total tax revenue is represented by a green rectangle.
