What is the profit per beer with the tax

Reference no: EM13176495

Suppose a bar's constant marginal cost per beer is $3.60 and it was making 40 cents per beer in variable profit without the tax. What is the profit per beer with the tax? Intuitively, why has the bar's profit fallen by more - in percentage terms - than the amount of the tax (10%)?

Reference no: EM13176495

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