Using the equations shown below, answer the following questions. QD = 100 – 2P QS = –20 + 2P

Using the equations shown below, answer the following questions.

QD = 100 – 2P

QS = –20 + 2P

a. What is the equilibrium price and quantity in this market? Show it graphically.

b. Calculate the consumer surplus and producer surplus? Show them graphically.

c. Assuming a tax of $10 is imposed on the seller side, what is the equilibrium price and quantity after the tax?

d. Calculate the deadweight loss and total surplus and show them graphically.

Expert Solution

Rahul Sunny answered 2 years ago

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