3. Tax Incidence III The market demand for a life saving drug is Q: = 400 (so demand is completely inelastic). The government intends to place a Slfunit tax on producers. a) Suppose supply for the drug is Q; = IDP. What is the equilibrium price before the tax? What is the equilibrium price after the tax? b) How much of the tax is borne by consumers? How much is home by producers? c) Now suppose new alternatives to the life saving drug are now available in the market so the demand no longer completely inelastic. Suppose demand is now Qd = 200 10? and supply is Q; = lOP. Again, consider the $10 tax on producers. What is the equilibrium price before the tax? What is the equilibrium price alter the tax? d) How much of the tax is borne by producers? How much is borne by consumers