Question: Use the demand function and the supply function for the avocado market to determine how the equilibrium price and quantity change when a 55¢ per

Use the demand function and the supply function for the avocado market to determine how the equilibrium price and quantity change when a 55¢ per lb specific tax is imposed on this market, as illustrated infigure.

(a) Tax Collected from Firms (b) Tax Collected from Consumers s2 S1 t = $0.55 ed P2-2.15 p1=2.001 P2 + 2.15 P 2.00.. ' t= $0.55- Pg_ t = 1.601 p,-1.6 , D2 Q2=74 Q1 = 80 Q, Million lbs of avocados per month 0 0 Q, Million Ibs of avocados per month

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Given that p t 080 Y 4000 and p f 040 the demand for avocados can be rewritten as Q 160 40 p and ... View full answer

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