The federal government recently decided to raise the excise tax on hard liquor.
a. Graphically illustrate the effects of this tax on the market for hard liquor.
b. Would a $1 increase in the excise tax on liquor increase the equilibrium price of liquor by $1? Explain.
c. How would the excise tax on hard liquor affect a beer distributor?

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The Answer of The federal government recently decided to raise the excise tax on hard liquor.
a. Graphically illustrate the effects of this tax on the market for hard liquor.
b. Would a $1 increase in the excise tax on liquor increase the equilibrium price of liquor by $1? Explain.
c. How would the excise tax on hard liquor affect a beer distributor?

The Federal Government Recently Decided to Raise the Excise Tax