Question: The demand function for a product is Qd= 100 - BdP .Suppose that there is a tax of t dollars per unit that producers must

The demand function for a product is Qd= 100 - BdP .Suppose that there is a tax of t dollars per unit that producers must pay and that the supply function for the product when the tax is t and the price is P is Qs = Bs( P - t) - 5.What is the equilibrium price as a function of the tax t? Define the "pass-through rate" of a small increase in the tax as the derivative of the market price consumers pay with respect to the tax: dP/dt. What is the pass-through rate of a small tax increase in this market? How does it depend on Bd and Bs?

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