Question 2 (Taxes) The market for bike rentals in Davis 1s characterized by demand and supply equations: QP=50-3P Q5=2P Assume the market for bike rentals 1s perfectly competitive. The mayor decides to raise revenue for a new bike lane by taxing bike rental companies 1 per hour for bike rentals. a) Graph the supply and demand curves. What 1s the pre-tax equilibrium price and quantity? Label on graph. b) What is the post-tax equilibrium quantity? Label on the graph. ) How much burden do consumers bear? Producers? Label on graph. d) Calculate and label the DWL generated by the tax. e) Suppose the mayor wants the consumer to bare the burden of the tax, not the small business owner so they decide to tax the consumption of bike rentals rather than the sellers. Is this an effective strategy