Everyone knows that the Elm City produces world class pizza - also called a

Problem 2. New Haven [a]Pizza Everyone knows that the Elm City produces world class pizza also called apizza at places like Sally's, ModernJ and Pepe's. Even a place named BAR makes excellent pies. Supply for pizzas in a given week in New Haven is given by: Q; = Lil + 2Dp Where p is the price per pizza. The demand in New Haven is given by: (JD = 10,9[1'0 250p a] Solve for the market equilibrium for weekly pizzas in New Haven. b] What is the demand elasticity at the equilibrium price? 1.I'Jhat is the supply elasticity? Which one is more elastic? The city is currently engaged in a long term construction projectto open up more of the downtown core to development, which is a costly endeavor. As a result. they city council is considering levying a tax of $1 per pizza sold in the city. c] What would he the new equilibrium under this tax policy? [Round price to nearest cent, quantity to nearest unit] The citizens of New Haven are outraged at the idea of taxing something so central to the city's identity and have said that such a tax would punish the residents of New Haven liar too much. d] Calculate the burden of this proposed tax; what percent of the tax would be "paid" by consumers [Round to nearest percent]? How does this relate to your answers for parta] '3 The town is now reconsidering the opti ofthis tax. A council member suggested selling the tax as a percentage tax, equal to $1 as a percent of the price solved for in [a]; which might be better marketing [i.e. ifa pizza were $50 in part a, the $1 tax would he a 2% tax]. e] Would a percentage tax equal to [i 1} [price solved for irl [an] deliver the exact same equilibrium? Why or why not? [No math is needed in answer]