2. The demand and supply curves for a price taking firm are as follows: Qd = 10-0.5 pd Qs 2-=-{- 2 + P (-2+Ps, 0, when Ps 2 when Ps < 2 4 where Qd is the quantity demanded when the price consumers pay is pd, and Q is the quantity supplied when the price producers receive is P. 1. With no tax, what are the equilibrium price and quantity? 2. Suppose the government imposes an excise tax of 3 TL per unit. What will the new equilibrium quantity be? What price will buyers pay? What price will sellers receive? Calculate consumer surplus (CS), producer surplus (PS) and deadweight (DWL) loss in this case. (Use a diagram while answering the question, show CS, PS and DWL loss areas in your diagram.