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Ken places a $20 value on a cigar, and Mark places a $17 value on it. The equilibrium price for this brand of cigar is

Ken places a $20 value on a cigar, and Mark places a $17 value on it. The equilibrium price for this brand of cigar is $15.Suppose the government levies a tax of $3 on each cigar, and the equilibrium price of a cigar increases to $18. Because total consumer surplus has

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fallen by more than the tax revenue, the tax has a deadweight loss

fallen by less than the tax revenue, the tax has no dead weight loss.

fallen by exactly the amount of the tax revenue, the tax has no deadweight loss.

increased by less than the tax revenue, the tax has a deadweight loss.

Increased by more than the tax revenue, the tax has no deadweight loss.

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