The demand for a good is given by QD = 99−3P and the supply by QS = 2P + 4. The market for this good is in equilibrium. Now, the government introduces a tax of $5 per unit to be paid by the producers. How large is the consumer surplus, producer surplus, and total welfare generated by this market after the introduction of the tax? Show your calculations. Sketch the market diagram and label all relevant prices and quantities.

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Q: Lesson 6- Individual and Market Demand Question 3

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Q: price ceiling

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Q: If a tax of $1.20 is imposed on consumers in this market, what is the tax revenue?

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Q: Lesson 6- Individual and Market Demand Question 2

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A: Qd = 1000 -8P (Demand) 8P = 1000 - QP = 1000 - Q8Pd = 125 - 0.125Q Qs = 2P (Supply) Before Tax  Qd =…

Q: at is the new consumer surplus?

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