Question: Question 1. ( Consider a market for gasoline in which quantity demanded is given by Q = 40 20P where P is price and supply

Question 1. ( Consider a market for gasoline in which quantity demanded is given by Q = 40 20P where P is price and supply is given by Q = 5 + 5P. (a) Solve for equilibrium quantity and price. (b) Suppose the government imposes a carbon tax shifts the supply curve to Q = 6 + 5P. Compute the new equilibrium quantity and price. Explain any changes.

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