Suppose that the demand for a commodity (in thousands) is given byQ = 30 - 6 p, where Q is the number of units of the commoditydemanded, and p is the price per unit. The supply of the commodity isQS = 6 p.(a) Assume the market is competitive. Find the price and quantityequilibrium of the commodity.
(b) The government decides to levy a tax of ￡1 per unit of commodity.Compute the after tax quantity, the price paid by consumers, andthe price received by producers. How much revenue does the taxraise for the government?
(c) Find the tax rate corresponding to an ad-valorem tax thatgenerates the same after tax equilibrium quantity as in (b) above. (d) Represent the incidence of the ad valorem tax on a graph.


(e)Calculate the deadweight loss associated with the tax definedin (b) above (and the share of this loss coming from lostconsumer surplus).
(f)How much of the tax revenue comes from the consumer surplus?

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