Price Quantity DemandedQuantity Supplied

(dollars per bunch)_____(bunches per week)_______________

10 100 40

12 90 60

14 8080

1670 100

1860120

a. What is the equilibrium price and quantity in this market?Is the market efficient or not?Explain.

b. Calculate the consumer surplus, producer surplus, and total surplus in the market.

c. If the sellers supply 60 bunches of roses per week:What is the minimum price that producers are willing to accept for the 60^thbunch?What is the maximum price that consumers are willing to pay for the 60^thbunch?Is this market efficient?Why or why not?

d. In the situation described in #3 of this problem, calculate the deadweight loss if any?What happens to total surplus in #3 compared to total surplus obtained in #1.

e. In the market for roses illustrated above (Part C), if sellers of roses are taxed at $6 a bunch, what are the new equilibrium price and quantity bought?

f. Who bears the statutory incidence of the excise tax? Who bears the economic incidence of the excise tax?Explain why this is so. If the tax on roses where imposed on the buyers instead of sellers, would your conclusion be different.Explain.