4. Suppose the weekly demand for a certain good, in thousands of units, is given by the equation P 8 Q and the weekly supply of the good is given by the equation P 2 Q, where P is the price in dollars. LO4

a. Calculate the total weekly economic surplus generated at the market equilibrium.

b. Suppose a per-unit tax of $2, to be collected from sellers, is imposed in this market. Calculate the direct loss in economic surplus experienced by participants in this market as a result of the tax.

c. How much government revenue will this tax generate each week? If the revenue is used to offset other taxes paid by participants in this market, what will be their net reduction in total economic surplus?