Question 1 a)Consider a market with demand equation as P = 100–0.5Q and supply equation as P = 40 + Q, where P is price in dollars and Q is quantity in units. (i)With the help of a diagram, establish the equilibrium price and quantity and compute the consumer surplus and producer surplus. (ii)Suppose the government imposes a per-unit tax of $15 on the producers, demonstrate the effect of tax using a diagram, and calculate the tax amount paid by the consumer and producer.(iii)Compute the new consumer surplus and producer surplus. How much is the deadweight loss resulted from the tax?
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