ECO – A country which does not tax cigarettes
A rustic which doesn't tax cigarettes is contemplating the introduction of a $zero.40 per pack tax.The financial advisors to the nation estimate the availability and demand curves for cigarettes as:QD = 140,000- 25,000PQS = 20,000 + 75,000P,the place and The nation has employed you to present the next info relating to the cigarette market and the proposed tax.a. What are the equilibrium worth and amount within the present surroundings with no tax?b. What worth and amount would prevail after the imposition of the tax?c. What portion of the tax can be borne by consumers and sellers respectively?d. Calculate the deadweight loss from the tax and illustrate it graphically.e. What tax income might be generated?