=+15.4 Business and Policy Application: License Fees and Surplus with Income Effects: In this exercise, assume the same set-up as in exercise 15.3 except that this time we will assume that hamburgers are a normal good for all consumers.

A. As in exercise 15.3, we’ll consider the long-run impact of a license fee for fast food restaurants on consumer surplus. In

(a) and

(b) of exercise 15.3, you should have concluded that the long-run price increases as a result of the license fee.