History Bookmarks Profiles Tab Window Help if; CENGAGE l MiNDTAP Homework (Ch 08) 3. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering levying a tax of $20 per unit on suppliers of either jeans or allergy medication. The supply curve for each of these two goods is identical, as you can see on each of the foilowlng graphs. The demand for jeans is shown by DJ (on the rst graph), and the demand for allergy medication is shown by DA (on the second graph). Suppose the government taxes jeans. The following graph shows the annual supply and demand for this good. It also shows the supply curve ( S + Tax) shifted up by the amount of the proposed tax ($20 per pair). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for jeans. Then use the black triangle (plus symbols) to shade the area that represents the deadwelght loss associated with the tax. 6') Jeans Market 60 55 S+Tax Supply H Tax Revenue 45 40 35: Deadwoight Loss 35 30 25 't 20 PRICE (Dollars per pair)