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The supply and demand for sugary drinks can be described as: P=Q and P=10-3Q
a.) Please calculate the equilibrium price and quantity. (Which I'm fairly certain is P=2.5 Q=2.5 ???)
b.) What is the equilibrium price elasticity of demand and price elasticity of supply? (I also can't seem to find a way to do the elasticity of supply within this question)
c.) If the government decides to impose a $1 tax on each gallon of sugary drink sold, what is the new equilibrium price and quantity?
d.) Among the $1 tax, how much tax burden does the consumers bear? How much tax burden does the producers bear?
e.) How much deadweight loss was caused by the sugary drink tax?
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