Calculate the deadweight loss created by the tax

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Reference no: EM13815809

Suppose that the $4 tax is placed on consumers instead, so that demand is given by the equation:

Qd=180-3(P+T)=180-3(P+4)

And supply equation is:

Qs=P-20

1) What would be the equilibrium price?

2) What is the equilibrium quantity?

3) Calculate the deadweight loss created by the tax

4) How much would producers and consumers (all added up) be willing to pay to get rid of the tax?

Reference no: EM13815809

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