Its microeconomic question

ii. iii. _-.'.-_.-.----.- m... l'"'_'"""' --I-'r-'-r-I Suppose government imposes an excise tax of $2 on the producers calculate the new equilibrium prices and quantity. Plot the new equilibrium on your graph and label consumer surplus, producer surplus. tax revenues, and deadweight loss. Was the tax effective in reducing the quantity consumed? What is the incidence of the tax on Consumers and producers? [6] Let instead of tax. the government is implementing a subsidy of $2 per unit. Calculate the equilibrium prices and quantity. On a new graph label the original equilibrium and the post subsidy equilibrium prices and quantities. Shade in the regions that represent consumer surplus. producer surplus. government expenditures, and DWL under the subsidy program