A market in perfect competition has the following demand and supply equations: Demand: QD(P) = 400 – 2 P Supply: QS(P) =

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A market in perfect competition has the following demand andsupply equations: Demand: QD(P) = 400 – 2 P Supply: QS(P) = 3P – 25Draw the supply and demand diagram with correct numbers on theendpoints. Solve the equilibrium price and quantity and label bothon the graph. Solve and label the consumer surplus. Solve and labelthe producer surplus. Impose a tax of 10 percent. Solve the pricepaid, the price received and the quantity sold. Draw a new supplyand demand diagram with the prices and quantities that will resultwhen a 10 percent tax is imposed. Both calculate and show on thediagram: (i) the total tax revenue paid, (ii) consumer surplus,(iii) producer surplus, and (iv) the excess burden of the tax.