Demand: Pd = a - 18*Qd , Supply: Ps = b + 12*Qs where

a is the intercept of the demand curve (consumers reservation price).

bis the intercept of the supply curve (suppliers' reservation price)

Pd and Ps represent market prices

Qd and Qs represents the quantity demand and supplied respectively

Based on a willingness to pay survey (WIP) it was determined that the maximum amount the average consumer is willing to pay for a CORN BEEF is $400. On the supply side, it was determined that the minimum price at which a Grace Kennedy would be willing to sell the CORN BEEF for is $100.

1.Suppose that the government impose a tax of 10% on each tin of CORN BEEF sold calculate the new quantity demanded, quantity supplied and the shortage or surplus?