#8 Use the accompanying graph to answer these questions:

a.Suppose demand is D and supply ia So. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price ?

b.Suppose demand is D and supply is So. If a price ceiling of $12 is imposed, what are the resulting surplus ? What is the cost to the government of purchasing any and all unsold units?

c.Suppose demand is D and supply is So so that the equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold?