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Fig. 6-4. The effect of a gasoline tax on consumption and production and total tax revenue.tex
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Fig. 6-4. The effect of a gasoline tax on consumption and production and total tax revenue.tex
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\documentclass[12pt]{article}
\linespread{1.25}
\usepackage{times}
\usepackage{pgfplots}
\pgfplotsset{compat = newest}
\usetikzlibrary{positioning, arrows.meta}
\usepgfplotslibrary{fillbetween}
\usepackage{amsmath}
\begin{document}
\begin{center}
\hspace*{-3cm}\begin{tikzpicture}
\begin{axis}[
scale = 1.2,
xmin = 0, xmax = 10,
ymin = 0, ymax = 10,
axis lines* = left,
xtick = {0}, ytick = \empty,
clip = false,
]
% Colouring areas
\fill[teal, opacity = 0.1] (0, 3.53) -- (4.14, 3.53) -- (4.14, 5.96) -- (0, 5.96);
\fill[violet, opacity = 0.1] (0, 3.53) -- (4.14, 3.53) -- (4.14, 3) -- (0, 3);
\fill[teal, opacity = 0.25] (4.14, 3.53)-- (5.05, 3.53) -- (4.14, 5.96);
\fill[violet, opacity = 0.25] (4.14, 3)-- (5.05, 3.53) -- (4.14, 3.53);
% Supply and demand curves
\addplot[color = blue, very thick] coordinates {(3,9) (6,1)};
\addplot[color = red, very thick] coordinates {(1,1) (9,6)};
\addplot[color = red, opacity = 0.3, very thick] coordinates {(1,4) (9,9)};
% Dashed lines
\addplot[color = black, dashed, thick] coordinates {(0, 5.96) (4.14, 5.96) (4.14, 0)};
\addplot[color = black, dashed, thick] coordinates {(0, 3.53) (5.05, 3.53) (5.05, 0)};
\addplot[color = black, dashed, thick] coordinates {(0, 3) (4.1, 3)};
% Coordinate points
\addplot[color = black, mark = *, only marks, mark size = 3pt] coordinates {(4.14, 5.96) (5.05, 3.53)};
% Labels
\node [right] at (current axis.right of origin){Gasoline, $Q$};
\node [above] at (current axis.above origin) {Price, $P$};
\node [above] at (5.25, 3.6) {$E$};
\node [above] at (4.35, 6.1) {$E^\prime$};
\node [right] at (6, 1) {$D$};
\node [right] at (9, 6) {$S$};
\node [right] at (9, 9) {$S^\prime$};
\node [left] at (0, 3.7) {$P_E$};
\node [left] at (0, 2.8) {$P_S$};
\node [left] at (0, 5.96) {$P^\prime$};
\node [below] at (5.05, 0) {$Q_E$};
\node [below] at (4.14, 0) {$Q^\prime$};
\node [above] at (2, 4.7) {$A$};
\node [above] at (1, 2) {$B$};
\node [above] at (4.5, 3.5) {$C$};
\node [above] at (6.2, 2.2) {$F$};
% Arrows
\draw[-{Triangle[length=4mm, width=2mm]}, red, opacity = 0.3] (8, 5.8) to (8, 7.8);
\draw[-Triangle] (1.3, 2.4) to [out = 0, in = 270] (2, 3.35);
\draw[-Triangle] (5.9, 2.6) to [out = 180, in = 270] (4.3, 3.4);
% Dimension lines
\draw[|-|] (4.14, -1) to (5.05, -1);
\node [below] at (4.59, -1) {Consumption reduction};
\draw[|-|] (-1, 5.96) to (-1, 3.8);
\node [below, align = left] at (-2.3, 6) {Consumer \\ incidence};
\draw[|-|] (-1, 3.6) to (-1, 2.8);
\node [below, align = left] at (-2.3, 3.5) {Producer \\ incidence};
\draw[|-|] (-3.6, 5.96) to (-3.6, 2.8);
\node [below, align = left] at (-4.2, 4.7) {Tax};
% Legend
\node [below right, draw, align = left] at (10.5, 10) {
\fcolorbox{black}{teal!10}{\makebox[\fontcharht\font`X]{$A$}} + \fcolorbox{black}{teal!25}{\makebox[\fontcharht\font`X]{$C$}} : Consumer surplus loss \\
\fcolorbox{black}{violet!10}{\makebox[\fontcharht\font`X]{$B$}} + \fcolorbox{black}{violet!25}{\makebox[\fontcharht\font`X]{$F$}} : Producer surplus loss \\
\fcolorbox{black}{teal!10}{\makebox[\fontcharht\font`X]{$A$}} + \fcolorbox{black}{violet!10}{\makebox[\fontcharht\font`X]{$B$}} : Total tax revenue \\
\fcolorbox{black}{teal!25}{\makebox[\fontcharht\font`X]{$C$}} + \fcolorbox{black}{violet!25}{\makebox[\fontcharht\font`X]{$F$}} : Deadweight loss
};
\end{axis}
\end{tikzpicture}\hspace*{-3cm}
\end{center}
\textbf{Figure 6-4:} The effect of a gasoline tax on consumption and production and total tax revenue.
\end{document}