Demand and supply for a commodity are given by
qd = 18 - 2p and qs = -10 + 5p (1 - t)
respectively where t is a tax levied on each unit sold (to be paid by the producer).
a) Draw the supply and demand curves on the same diagram when t = 0
b) Find the equilibrium quantity sold when t = 0
c) Find the equilibrium quantity sold when t = 0.32 (i.e a tax rate of 32%).
d) Derive a functional relationship between p and t in equilibrium.