Assume that the monthly demand for Gala apple in the US is given by q=1200-300p and quantity is in million pounds. The monthly supply of Gala is q= -200+400p for p>$0.5. Now assume that the government has imposed a quantity tax equal to $0.14 on each pound of apple. What is the new equilibrium consumer price, producer price and quantity?

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
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Assume that the monthly demand for Gala apple in the US is given by q=1200-300p and quantity is in million pounds. The monthly supply of Gala is q= -200+400p for p>$0.5.

Now assume that the government has imposed a quantity tax equal to $0.14 on each pound of apple. What is the new equilibrium consumer price, producer price and quantity?

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