Question: Demand and supply equation for the Gasoline is given below: Determine the equilibrium price and quantity? Q D = 150 - 25P b Q S

Demand and supply equation for the Gasoline is given below:

  1. Determine the equilibrium price and quantity?

QD = 150 - 25Pb

QS = 60 + 20Ps

Suppose a $1 per gallon tax is imposed on the producer.

  1. Draw the demand and supply curves. Show the equilibrium price and quantity on the

graph?

  1. Find out the consumer surplus after the tax
  2. Find out the change in the producer surplus
  3. Find out the tax revenue
  4. Find out the DWL

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