# What is the impact of this tax on pounds consumed per day?

For the following assume that the demand for yellow fin tuna sushi (in dollars per pound per day) i Show more For the following assume that the demand for yellow fin tuna sushi (in dollars per pound per day) is given by: Qd = 200 15P and the supply function (pounds per day) is given by 20P. a. Graph the supply and demand function. Be sure to completely label the graph including all intersections with the intercept. b. Derive the equilibrium quantity and price and calculate the consumer and producer surplus at the equilibrium. c. Assume that an advertising campaign has been used and the new demand function is given by: Qd = 280 15P. What is the new equilibrium price and quantity? If the advertising campaign cost \$1 million total would the additional revenue over the course of a year justify that expenditure? d. In order to preserve the dwindling supply of yellow fin tuna the government imposes a \$1/lb tax on the final price of tuna (that is at the consumer level). What is the impact of this tax on pounds consumed per day? Who is bearing the largest portion of the tax (that is calculate the price at each level)? Based on the new price(s) and quantity what is the consumer and producer surplus (and compare that to your answer in (b) above the tax revenue per day and the deadweight loss per day? Show less Posted in Uncategorized