Let QD = 80 − 20P be the demand function for cigarettes and let QS =10P − 10 be the supply. Suppose the government introduces a specific tax of τ = 1 to belevied on the producers• Obtain the new supply curve.• Determine the equilbrium quantity and price under the tax.• Compute the government revenue.• Compute the incidence (burden) on the consum

Sorry, there seems to be a misunderstanding. I'll continue with the solution to the problem.

Step 1: Obtain the new supply curve The tax is levied on the producers, so it will shift the supply curve upwards by the amount of the tax. The new supply curve will be QS = 10P - 10 + τ, where τ is the tax. Substituting τ = 1, we get QS = 10P - 9.

Step 2: Determine the equilibrium quantity and price under the tax The equilibrium is where the quantity demanded equals the quantity supplied. So, we set QD = QS and solve for P.

80 - 20P = 10P - 9 30P = 89 P = 89/30 = 2.97 (approximately)

Substitute P = 2.97 into either the demand or supply equation to find the equilibrium quantity:

QD = 80 - 20*2.97 = 20.6 (approximately)

Step 3: Compute the government revenue The government revenue from the tax is the tax rate times the quantity sold, which is τQ = 120.6 = 20.6.

Step 4: Compute the incidence (burden) on the consumer The incidence on the consumer is the difference between the price they pay with the tax and the price they would pay without the tax. Without the tax, we can find the equilibrium price by setting the original supply and demand equations equal:

80 - 20P = 10P - 10 30P = 90 P = 90/30 = 3

So, the incidence on the consumer is 3 - 2.97 = 0.03. This means the consumer is paying an additional 0.03 per unit due to the tax.