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import matplotlib.pyplot as plt import numpy as np # Setting up the plot fig, ax = plt.subplots(figsize=(8, 6)) # Price and Quantity Q = np.linspace(0, 10, 100) D = 10 - Q # Demand curve S1 = 2 + Q # Initial Supply curve S2 = 3 + Q # New Supply curve (after tax) # Plotting the curves ax.plot(Q, D, label="Demand Curve", color='blue') ax.plot(Q, S1, label="Initial Supply Curve (S1)", color='green') ax.plot(Q, S2, label="New Supply Curve (S2)", color='red') # Marking the equilibrium points ax.fill_between(Q, D, S1, where=(Q >= 0) & (Q <= 6), color='gray', alpha=0.3, label="Deadweight Loss Area") # Labels and title ax.set_xlabel('Quantity') ax.set_ylabel('Price') ax.set_title('Deadweight Loss from the Tax Increase') ax.legend() plt.grid(True) plt.show()
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