American Tennishoe, Inc., is concerned because Congress has proposed an excise tax of $1 on each pair of tennis shoes sold in the United States. They are lobbying against the tax through an advertising campaign that says the tax will raise the price of tennis shoes by $1. Use supply and demand graphs to show how much of the tax will actually be passed on to consumers.

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The Answer of American Tennishoe, Inc., is concerned because Congress has proposed an excise tax of $1 on each pair of tennis shoes sold in the United States. They are lobbying against the tax through an advertising campaign that says the tax will raise the price of tennis shoes by $1. Use supply and demand graphs to show how much of the tax will actually be passed on to consumers.