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Demand for a good can be represented as Q D =1000-100P. On the supply side, producers have constant marginal cost of $5. Suppose thegovernment introduces
Demand for a good can be represented as QD=1000-100P. On the supply side, producers have constant marginal cost of $5. Suppose thegovernment introduces a unit tax of $2 per unit.
Part 1) The gross price per unit paid by buyers with the tax in place is $
Part 2) What is the welfare loss to consumers at the market level due to the tax? (In other words, what is the change in consumer surplus due to the tax?). Please enter your answer as a positive number indicating the magnitude of the change in consumer surplus: $
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