New York has the highest cigarette taxes in the country. The price of an average pack of
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New York has the highest cigarette taxes in the country. The price of an average pack of cigarettes in New York City is $13. The combined state and city taxes are $5.85 a pack. The average income of smokers is less than that of nonsmokers.
What is the effect of the tax on consumer surplus and producer surplus, and what is the excess burden of the tax?
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In Figure 83 the consumer surplus shrinks from area acf to area abe and the produc...View the full answer
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