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Check if answers are correct for all sections. Please show your work and answer all sections of question a-c. The government raises taxes on cigarettes from $1 per to $2 per pack. Prior to the tax increase, 5 million packs were sold each year. The new equilibrium quantity is 4 million packs. a. Calculate the total revenue before and after the tax increase. Before the increase, tax revenue was $ 5 million. After the increase, tax revenue was $ 8. million. b. Revenue increased which tells us that the price effect dominated. c. Now calculate the price and quantity effect of the tax increase. The price effect (the revenue gained from the increase in T) is $ million, The quantity effect (the revenue lost from the decrease in Q) is $ million. (remember to use a negative sign here since it's lost revenue) [Note: does this verify your answer from (b)?] If demand is elastic, an increase in the level of a tax will decrease tax revenue. All other things equal, a tax on breakfast cereal would be…