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9. Once again consider the graph shown to the right. The amount of tax revenue generated is:
All we need to do to compute the tax revenue is multiply the amount of the tax by the number of units sold after the tax is imposed. This is the same as the area of the orange rectangle to the right.
After the tax 65 units are sold. The tax is $35 ($75-$40) or the distance between the two supply curves. So, the revenue from the tax is: Rev = 65 x $35 = $2275.
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