Use the graph and the inverse demand equation (P=50 - .5Q), inverse supply equation (P=0.333Q) and the inverse supply equation with tax (P=0.333Q + t).     a. Solve for the DWL and tax revenue when the tax is increased to t=30     b. Solve for the DWL and tax revenue when the tax is increased to t=40     c. Explain what happens to DWL and tax revenue as tax size increases from 10, to 30 to 40. 3.  Note: Show solutions and round off answers to whole numbers.

Principles of Microeconomics
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ISBN:9781305156050
Author:N. Gregory Mankiw
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Chapter8: Application: The Cost Of Taxation
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2. Use the graph and the inverse demand equation (P=50 - .5Q), inverse supply equation (P=0.333Q) and the inverse supply equation with tax (P=0.333Q + t).
    a. Solve for the DWL and tax revenue when the tax is increased to t=30
    b. Solve for the DWL and tax revenue when the tax is increased to t=40
    c. Explain what happens to DWL and tax revenue as tax size increases from 10, to 30 to 40. 3. 

Note: Show solutions and round off answers to whole numbers.

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