Consider a market where supply and demand are given by P = 8 and P = 26 - Q respectively.

Use the graph given below to answer the following questions.

Note:Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places.

Demand

a)Graph the demand and the supply curves.

b)What is the current equilibrium quantity?

Equilibrium Quantity =

0

units

c)Impose a tax of $10 per unit on the good so the supply curve is now P = 18. Calculate the new equilibrium quantity, and draw the new supply in the diagram.

Quantity with Tax =

0

units

d)Calculate the tax revenue generated.

Tax Revenue = $

0

e)Calculate the deadweight loss.

Deadweight Loss = $

0