00:01
So the first thing i would recommend doing in this case is to graph what's going on, right? let's try to draw a picture.
00:07
And a picture of a market is a story about quantity and price and about demand and supply.
00:14
So before the tax, we know that the quantity was 25 and we know that the price was 7.
00:21
Now the government's going to come in with a tax.
00:23
And the tax is being applied to consumers, right? so the tax is going to shift the demand curve down.
00:32
Consumers are going to have to pay more, which means they're willing to pay less overall, less directly to producers.
00:38
So after the tax is going down, the demand minus the tax.
00:43
The new equilibrium is 19.
00:47
And consumers pay eight, right? they pay eight.
00:51
That's the height of including the tax, right? they are paying eight.
00:56
And producers are receiving four...