Compute a market with demand function D(p) = 1000 ? 10p and aggregate supply function S(p) = ? 200 + 20p if p? 10 [and S (p) = 0 otherwise].
1. Calculate the competitive equilibrium price and the quantity, as well as the equilibrium value of consumer surplus and the producer surplus.
2. Suppose that a unit tax t = 15 is imposed in this market. Calculate the new equilibrium price and the quantity, as well as CS, PS, tax revenue and the deadweight loss due to the taxation.