1.Suppose we are looking at the market for notebooks. Initial equilibrium price is 8 dollars and initial equilibrium quantity is 4 notebooks. No one is williing to buy notebooks when the pirce is 16 dollars. Therefore, quantity demanded=0 when P=16. Graph supply and demand curves based on this information.

2. Calculate cusumer surplus, producer surplus and total surplus.

3. Suppose an excise tax on production of notebooks is implemented. Use the graph below to calculate the share of tax paid by consumers and producers.

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1 To graph the supply and demand curves based on the given information The initial equilibrium price ... View the full answer