Suppose the current equilibrium price of a quarter-pound hamburger is $5, and 10 million quarter-pound hamburgers are

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Suppose the current equilibrium price of a quarter-pound hamburger is $5, and 10 million quarter-pound hamburgers are sold per month. After the federal government imposes a tax of $0.50 per hamburger, the equilibrium price of hamburgers rises to $5.20 and the equilibrium quantity falls to 9 million. Illustrate this situation with a demand and supply graph. Be sure your graph shows the equilibrium price before and after the tax; the equilibrium quantity before and after the tax; and the areas representing consumer surplus after the tax, producer surplus after the tax, tax revenue collected by the government, and deadweight loss?

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Microeconomics

ISBN: 9780135952955

8th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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