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The accompanying tables ShUWS the willingness to pay for a single-shot cappuccino of ve consumers and the cost of selling a single-shot cappuccino for ve
The accompanying tables ShUWS the willingness to pay for a single-shot cappuccino of ve consumers and the cost of selling a single-shot cappuccino for ve coffee shops. For simplicity, assume that each consumer buys at most one cappuccino and each producer sells at most one cappuccino. Therefore, the supply and demand curves will be step functions. Consumer Willingness to pay [3} Producer Cost [3} Stephen 3-25 MoJo's 1.?5 Suppose the government is attempting to cut doWn caffeine consumption by imposing a tax of $1 per cappuccino on consumers. Assume that there are no administrative costs from the tax and that consumers or producers who are indifferent will trade. Without the excise tax, what are the equilibrium quantity and price? equilibrium quantity: cappuccinos equilibrium price: $ With the excise tax, what are the equilibrium quantity and the price that will be paid to producers? new equilibrium quantity: cappuccincs price paid to producers: 3 What is the deadWeight loss from the imposition of this excise tax? deadureigit loss: $
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