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You are given the following information about the market for market data for a brand of refrigerators.
Demand: P = 1200 - 0.35Q
Supply: P = 150 + 0.25Q
where P = Price in dollars and Q = Quantity.
a. calculate the consumer and producer surplus in this market.
Now Suppose the government places a sales tax on refrigerators. The market information following the imposition of the tax is then:
Supply: P = 165 + 0.25Q
b. Calculate the new consumer and producer surplus in this market.
c. Calculate any deadweight loss in the market due to the tax.
d. Calculate the tax revenue and the incidence of the tax for consumers and producers.
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