Answer Happy

Please show detailed explanation accompanied with excel sheet.
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QUESTION 6 The government is considering introducing a new tax policy. You have been asked to evaluate this program. Part of the analysis involves the calculation of producer surplus relating to the market for bottled wine. To calculate the producer surplus you need to derive the supply curve. You observe that at the current market equilibrium, the price of the wine equals $70 and the quantity equals 25 units. After some research you also find that at this equilibrium, the price elasticity of supply is 1.7. a) What is the equation for the supply curve? Assume that the supply schedule linear. = b) If an ad valorem tax of 10% is applied the new supply curve is = c) If the price buyers pay after the tax is $75, 1) What is the new equilibrium quantity = II) What is the price the suppliers receive after the tax is implemented = d) The change in producer surplus is = Provide your answers in whole numbers in the boxes above. In your spreadsheet please provide a detailed explanation of your calculations along with a graphical illustration of the tax on supply (1 marks). Ensure you indicate all relevant details on the graph.