1. Suppose the market for a pack of cigarettes can be expressed as

QD(P)=1002PandQS(P)=3P.

(a) Find the equilibrium price and quantity.

(b) Find the elasticity of demand at the equilibrium point, .

(c) Find the elasticity of supply at the equilibrium point, . (d) In New Jersey, cigarettes are subject to a t = 2.70$ per pack excise tax.1Given that an excise tax is paid by sellers, what is the new market supply function?

(e) Find new equilibrium price and quantity with an excise tax. What is the price paid by the buyers, PB, and the amount of money collected by sellers, PS?

(f) How much tax revenue is collected by the government? What fraction is paid by buyers/sellers?