QUESTION 3 (36 points) Although electricity is not a major component of agricultural production costs in U.S. farm businesses (1 to 6% of total costs according to the USDA), farmers have invested more and more in small residential solar panel systems for within farm electricity generation. Also, landowners have leased land to utility companies for large utility-scale solar systems. Suppose that the inverse demand PD = 20 - Q and inverse supply Ps = 2 + 5 * Q represent the market for small solar panels systems in South Carolina, where Q is the number of systems installed per day and P is the price per installed system (P) in thousand dollars. A) One of the reasons for the increased adoption of solar panels in the United States is the reduction in cost due to large investments in solar energy technologies. Would a reduction in cost cause a shift in the supply curve or the demand curve for solar panels? B) Represent this cost reduction by drawing a shift in the market for solar panels. What happened to the equilibrium price and equilibrium quantity? C) Based on the inverse demand and inverse supply equations above, calculate the equilibrium quantity and price. D) What is the price elasticity of demand (Ed) at the equilibrium price and quantity? E) What is the price elasticity of supply (Es) at the equilibrium price and quantity? F) Now suppose the government implements a tax of $6 thousand dollars per system of this size. What is the new equilibrium quantity of solar panels installed after the tax? G) After the tax, what is the producer price (Ps)? And the consumer price (Pd)? What is the tax incidence and why? H) Show C), F), and G) on a graph. 1) What is the change in CS? J) What is the change in PS? K) What is the tax revenue? L) What is the deadweight loss (DWL)