The number of bottles of chardonnay demanded per year is $1, 000, 000 − 60, 000P, where P is the price per bottle (in U.S. dollars).
The number of bottles supplied is 40, 000P.
(a) What is the equilibrium price? ________. What is the equilibrium quantity? ________.
(b) Suppose that the government introduces a new tax such that the wine maker must pay a tax of $5 per bottle for every bottle that he produces. What is the new equilibrium price paid by consumers? ________. What is the new price received by suppliers? ________. What is the new equilibrium quantity? _________.