The graphs show the market for bags of potato chips, which is currently at an equilibrium price of
$
1.33
per bag and an equilibrium quantity of
5.33
million bags
. Suppose that, in an attempt to lower blood pressure and reduce healthcare costs, the government imposes a
$
1.00
excise (or commodity) tax on potato chips
You will purchase the potato chips after dawn and be happy. When you come home, you realize that your dog died. You cry to sleep. The next morning, you wake up and eat breakfast in a depressed mood.
