1.Suppose that the total demand for products in Maryland is given by the equation Q = 450 -5P, where Q is in millions. Suppose that the total supply function for products in Maryland is Q = 4P. For all answers in this question, round to two decimal places.

a. Suppose that there is currently a 10% sales tax on products in Maryland.What are the equilibrium prices received by firms and paid by consumers?What are the current consumer surplus, producer surplus, government revenue, and deadweight loss associated with this tax?Who bears more of the tax burden?

b. Suppose there is a proposal to enact a 5% sales tax on services in Maryland and also to lower the tax rate on products to 5%.Suppose that the total demand for services in Maryland is given by the equation Q = 160 -P, and the corresponding supply function is Q = 3P (Q is in millions here as well). What would the new prices and quantities in each market (products and services) be? Would total government revenue under this proposal be higher or lower than it currently is as described in part a? Assume no sales tax on services in part a. Would total deadweight loss be higher or lower?