The following graph shows the daily market for wine. Suppose the government institutes a tax of $11.60 per bottle. This places a wedge between the price buyers pay and the price sellers receive. F0 45 40 Supply 35 30 Tax Wedge 25 20 15 10 5 Demand 0 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bottles of wine) PRICE (Dollars per bottle) S

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