3. The (inverse) equations for the supply and demand for FrenchChampagne are given below. Supply: P

3. The (inverse) equations for the supply and demand for FrenchChampagne are given below. Supply: P = 40 + ¼Q Demand: P = 100 – ½Q[Half point for each question] a) compute the equilibrium price and quantity of Champagne. b) Suppose and excise tax (i.e. a tax paid by producers) of $18per bottle is imposed. What are the equations for the new supplyand demand curves? What is the new EQ price and quantity? Specifywhat the prices paid by consumers and received by producersare? c) Do the same as (b) for a sales tax (i.e. a tax paid byconsumers) of $18 per bottle and explain whether the burden hasshifted from producers to consumers along with the incidence of thetax from excise to sales. d) Calculate the Consumer Surplus and Producer Surplus beforeand after the tax is put into place. How much revenue is raised?Calculate any deadweight loss from the tax. . . .

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