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Consider the following demand and supply functions for a good: QD = 35 - 4P and QS = 10 + 2P. Initially, the market is
Consider the following demand and supply functions for a good: QD = 35 - 4P and QS = 10 + 2P. Initially, the market is in equilibrium at the price level 4.17 and quantity 18.33. Suppose the government imposes taxes worth taka 0.84 per unit on sellers. Due to this, the price paid by buyers in the market is 4.0 and the price received by sellers is 3.16.
a) Calculate the government's tax revenue.
b) Find the deadweight loss of tax.
Answer both sub parts
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