Suppose the demand curve for pizza can be represented by equation Qd=20-2P, where Qd is the quantity demanded and P is the price. The supply curve for pizza can be represented by the equation Qs=P-1, where Qs is the quantity supplied.

a) What are the equilibrium price and quantity in the pizza market? (2 marks)

b) Suppose the government impose a $3 tax per pizza. How much more will consumers now pay for pizza? (Hint: the prices in the demand and supply equations are no longer equal. The price that determines quantity demanded now equals the price that determines quantity supplied plus $3).