Answer Happy

Suppose that the demand curve for video games is Q=100-10P and the supply curve is Q=10P a. What is the equilibrium price and quantity in the market? Show this in a graph. Note: you do not need to draw it to scale, just label all points correctly. b. Calculate the consumer surplus, producer surplus, and total surplus in the market. c. The government imposes a specific tax of $3 per unit. Find the new quantity after the tax, the price of buyers, and price to sellers in the market. Mark these in your graph. d. Calculate the consumer surplus, producer surplus, tax revenue, and deadweight loss after the tax is imposed. e. How did the total surplus in the market change (be specific using numbers) and why did this happen?