Question
The city government is considering two tax proposals: A lump-sum tax of Rs.300 on each producer of hamburgers. A tax of Rs. 1 per burger,
The city government is considering two tax proposals:
A lump-sum tax of Rs.300 on each producer of hamburgers.
A tax of Rs. 1 per burger, paid by producers of hamburger.
a). Which of the following curves - average fixed cost, average variable cost, average total cost, and marginal cost - would shift as a result of the lump-sum tax? Show this in a graph. Label the graph as precisely as possible?
b). Which of these same four curves would shift as a result of the per-burger tax? Why? Show this in a new graph. Label the graph as precisely as possible?
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