Suppose the demand for football tickets is QD=360-10P and the market supply is QS=20P. a) Calculate the market equilibrium price and quantity. b) Suppose the government imposes a $4 excise tax per ticket on the sellers of tickets. Calculate the new market equilibrium price and quantity. c) What price would consumers pay after the tax is imposed? d) What price would firms receive after the tax is imposed? e) What share of the tax is borne by the consumers? f) What share of the tax is borne by the sellers? g) What can you say about relative elasticities of demand and supply based on your answers in part e and part f? h) Calculate tax revenue collected by the government from this tax. i) Calculate the deadweight loss of the tax. j). Explain what your answer in part i means, i.e. what does the number mean? k) Draw a neat diagram and show initial equilibrium, after-tax equilibrium, tax revenue and deadweight loss from tax.

Q3. Suppose the demand for football tickets is QD=360-10P and the market supply is QS=20P.

1. a) Calculate the market equilibrium price and quantity.

1. b) Suppose the government imposes a $4 excise tax per ticket on the sellers of tickets. Calculate the new market equilibrium price and quantity.

1. c) What price would consumers pay after the tax is imposed?

1. d) What price would firms receive after the tax is imposed?

1. e) What share of the tax is borne by the consumers?

1. f) What share of the tax is borne by the sellers?

1. g) What can you say about relative elasticities of demand and supply based on your answers in part e and part f?

1. h) Calculate tax revenue collected by the government from this tax.

1. i) Calculate the deadweight loss of the tax.

j). Explain what your answer in part i means, i.e. what does the number mean?

1. k) Draw a neat diagram and show initial equilibrium, after-tax equilibrium, tax revenue and deadweight loss from tax.