ib-economics-quantitative

Question 3.2In the market for chocolate bars, the demand function is Q D = 900 – 100P and the supplyfunction is Q S = 200P, where price is given in $ per chocolate bar and quantity is given inthousands of chocolate bars per month. The government then imposes a specific tax of$1.50 on chocolate bars, to discourage their sales.Without using a graph, calculate, showing your working fully:i. The original equilibrium price and quantity before the tax.ii.The new supply function, after the tax.iii.The new equilibrium price and quantity.iv.The change in consumer expenditure.v. The change in producer revenue.vi.The government tax revenue.Produced by Ian Dorton & Jocelyn Blink Page 21