Question 1: The teenagers of Good Times Island love to have bon fires on the beach every Sat- urday night. They especially love to burn rubber tyres because of the thick black smoke the tyres produce. The parents of Good Times Island, however, hate these fires. The smell of the burning tyres makes them sick. There are two companies that supply rubber tyres: Greatyear ($1) and Firepebble ($2). Their supply functions are given by (1) Qs1 = 1.75P and (2) Qs2 = 2.25P. where Q is the number of tyres sold per week. There are two neighboring villages on the Island. Their demand functions are given by (1) QD1 = 75 -3P, and (2) Qp2 = 25 - P. Assume that rubber tyres have no other purpose (i.e. they are only good for bon fires and cannot be used for transportation) and that rubber tyres are neither imported nor exported so that the island's demand for tyres must be met by the two suppliers. Also assume that the tyre suppliers are located in between the two villages so islanders can easily purchase tyres from either supplier and that bon fire smoke easily travels back and forth between the two villages. Using this infor- mation, answer the following questions.Part [i] The government realizes that. without intervention. the island is burning too many tyres and that the community 1would he better off if fewer tyres 1were burned- They decide to charge tyre producers a flat per'unit output tax on each tyre produced {by flat: I mean the same ta': for each unit produced]- 'What tax will induce the market to produce the socially optimal amount of tyres?II Illustrate the effect this tax will have on Market Eiupplyi Market Demand: and the Market Equilibrium. Part (j) Suppose instead that the government decides to charge islanders a flat per-unit con- sumption tax on each tyre burned. What tax will induce the market to consume (burn) the socially optimal amount of tyres? Illustrate the effect this tax will have on Market Supply, Market Demand, and the Market Equilibrium