The demand for a peanut is given by D(p) = 80 5p. The supply is given by S(p) = 15p. Price is measured in thousand dollars.

a. Draw demand and supply curves.

b. What is the equilibrium price and quantity?

c. Suppose now that the government legislates a 100% sales tax on this peanut, to be collected from the seller. Find the equation of the new supply curve and draw it on the graph.

d. Find and indicate the new equilibrium price and quantity.

e. Calculate the changes in the producer surplus due to the tax

f. Calculate the deadweight loss of the tax and indicate it on the graph.