In the discussion on rationales for intervention in markets, we note that Manning found external costs of

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In the discussion on rationales for intervention in markets, we note that Manning found external costs of $0.33 per pack of cigarettes.

(a) Draw a supply and demand diagram, and graph Manning’s external costs of $0.33

(in 1995 dollars) based on a market price of $1.50 (in 1995 dollars) per pack.

(b) If a tax of $0.33 were imposed, what would happen to the market price, and to the equilibrium quantity?

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The Economics Of Health And Health Care

ISBN: 9781138208049

8th Edition

Authors: Sherman Folland, Allen C. Goodman, Miron Stano

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