Demand: P = 15 - (1/3) (1) Supply: P 3+ (1/3) (2) 1. Solve for the equilibrium price (Ps) and quantity (QE) without any tax 2. Suppose the government collects a $t per-unit tax on buyers which curve will be affected by this tax? Write down the new supply and demand equations after this tax is imposed Neu Demand: P (3) New Supply: P (4) 3. After this tax is imposed find the new market equilibrium and the new equilibrium price and quantity Q. Both P and Q, should be functions of t. 4 Write the tax revenue as a function of t and plot it. At which value of would the tax revenue maximized? 5. Write the deadweight loss as a function of Recall the formula to calculate DWL is DVD 0.51(Q2 -) Note here that itself is a function of 7. If the tax ratet doubles by what factor would the deadweight loss increase? Demand: P = 15 - (1/3) (1) Supply: P 3+ (1/3) (2) 1. Solve for the equilibrium price (Ps) and quantity (QE) without any tax 2. Suppose the government collects a $t per-unit tax on buyers which curve will be affected by this tax? Write down the new supply and demand equations after this tax is imposed Neu Demand: P (3) New Supply: P (4) 3. After this tax is imposed find the new market equilibrium and the new equilibrium price and quantity Q. Both P and Q, should be functions of t. 4 Write the tax revenue as a function of t and plot it. At which value of would the tax revenue maximized? 5. Write the deadweight loss as a function of Recall the formula to calculate DWL is DVD 0.51(Q2 -) Note here that itself is a function of 7. If the tax ratet doubles by what factor would the deadweight loss increase