Taxation and Welfare Price ($) 12 E B F G H D 90 150 210 Quantity Figure 1: Market for Wine (litre) 1. Based on figure 1 above, answer the following questions. a) The government imposes an indirect tax of $6 per litre. What is the tax incidence? (Hint: what is the price buyers pay and the price sellers receive with the tax) (3 Marks) b) Calculate the government revenue. (2 Marks) c) What are the changes in consumer surplus and producer surplus? What is the deadweight loss? (Hint use the areas from the diagram) (4 Marks)