One store sells bowling balls, the supply is given by p = 50 + 5q. The inverse demand p (q) for bowling balls is given by p = 100 - 2q where p is the price of bowling balls and q is the consumption of bowling balls.
1. Find out the total quantity of bowling balls consumed and what the price per unit is. Explain the consumer surplus and the producer surplus.
2. The government set a tax of 2$ on bowling balls, determine the total quantity of bowling balls consumed, the price paid by consumer and the price received by the store. Estimate the consumer surplus, the tax revenue, the producer surplus and the dead weight loss. Determine the share of the tax paid by the consumer and the one paid by the producer.