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4. The Laffer curve Governments often place so-called sin taxes on goods or services such as cigarettes, alcohol, and pornography. These kinds of taxes are popular with politicians because they are usually more palatable to voters than income taxes. To understand the effect of such a tax, consider the monthly market for adult DVDs, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Adult DVDs 40 l Quantity 48 (DVDs) Demand Price (Dollars per DVD) 2400 Supply Price 16.00 (Dollars per DVD) Tax Wedge (Dollars per DVD) 8.00 2+ 16ーーーーブ. 12 0 12 24 48 0 72 108 120
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media%2F30a%2F30ac5ee4-8e64-482a-840f-2d
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