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Unformatted text preview: ii. Calculate and shade CS and PS. iii. Calculate and shade the cost of the subsidy iv. Shade in the area representing the DWL 3. Suppose that the supply and demand for a good are given by the following equations: Q d = 300 & 10 P Q s = 100 & 40 P A. Solve for the equilibrium price and quantity. B. Suppose that a tax of $1 : 25 is imposed. Solve for the new equilibrium price consumers pay, producers receive and tax incidence. C. Solve for the CS, PS, tax-revenue and DWL following a tax. 4. 2 A B C D E F G Demand Supply + tax Supply H A. What is the change in CS due to the tax depicted being imposed in this market? B. What is the Tax Revenue C. What is PS? D. What is DWL? 3...
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- Fall '08