Students are to submit answers to the followingquestionsfor grading onMyUniby9pmFriday 30thApril

Q1.Use this article to help you answer the following questions.

Irish High Court Rules Subway's Sandwich Bread Is Not Legally Bread

Oct 1, 2020,10:08ambyKelly Phillips Erb

https://www.forbes.com/sites/kellyphillipserb/2020/10/01/irish-high-court-rules-subways-sandwich-bread-is-not-legally-bread/?sh=2cbed0f94f51

a)Assume the Irish government imposes a 15% tax on Subway sandwiches, usea clearly-labelled diagram toshow what happens to price and quantityafter the tax change? Is the newsandwichprice old price plus tax? (You can assume the curves are linear all the way to the axes)(3marks)

b)Show the tax burden for consumers and for producers and on your diagram. Who would bear more of the tax burden and why?(2mark)

Q2.Letthedemand forkombuchabe represented by the following demand curve:

P = 180-3Q

And suppose thatPureSpringis the monopoly supplier ofkombuchatoAdelaidewith a marginal cost curve:

MC =80+4Q;

a)On a clearly labeled diagram, sketchthe demand, marginal revenue, and marginal cost curvesand calculate and showthemonopolist's profit-maximisingquantity(QM) and the price that will be charged in the market (PM).(3marks)

b)Calculate the consumer surplus and producer surplus at the monopoly equilibrium and the deadweight loss of the monopoly outcome compared to the socially efficient quantity and show these on your diagram. (2marks)