Question: Suppose that the demand for apples is the same in the separate markets of New York and California and so is the equilibrium price and

Suppose that the demand for apples is the same in the separate markets of New York and California and so is the equilibrium price and quantity, however the supply is potentially different between the two markets. In both states the same per unit tax is levied, but the equilibrium quantity post tax is lower in California than in New York.

(a) What comparison can you make about the supply curves across the two markets?

(b) Does an individual consumer who buys a single apple pre and post tax lose more surplus from the tax in California or in New York?

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