We explored the impact of recurring license fees and a franchising fee on an industry's output and price. We now consider their impact on consumer and producer surplus. Suppose that all firms in the fast food restaurant business face Ushaped average cost curves prior to the introduction of a recurring license fee. The only output they produce is hamburgers. Suppose throughout that hamburgers are a quasilinear good for all consumers. (a) First, assume that all firms are identical. Illustrate the long run market equilibrium and indicate how large consumer and long run producer surplus (i.e. profit) are in this industry. (b) Illustrate the change in the long run market equilibrium that results from the introduction of a license fee. (c) Suppose that the license fee has not yet been introduced. In considering whether to impose the license fee, the government attempts to ascertain the cost to consumers by asking a consumer advocacy group how much consumers would have to be compensated (in cash) in order to be made no worse off. Illustrate this amount as an area in your graph. (d) Suppose instead that the government asked the consumer group how much consumers would be willing to pay to avoid the license free. Would the answer change? Now assume that hamburgers are a normal good for all consumers. (e) Consider your graph from part (c). Does the area you indicated over- or under-estimate the amount consumers would have to be compensated (in cash) in order to accept the license fee? (f) Does the area over- or under-estimate the amount consumers are willing to pay to avoid the license fee