Suppose the demand function for avocados isQ-104 - 40p + 20p, +001Y,where p is the price of avocados, P is the price of tomatoes, and Y is average income, and the supply function for avocados isQ-58 + 15p-20p.where pr is the price of fertilizer.Suppose p $0.80, Y= $4,000, and p 30 40. What is the equibrium price and quantity of avocados?The equilibrium price of avocados isand the equilibrium quantity isQ=80 units. (Enter your responses rounded to wo decimal places)Suppose the govemment charges a $1.65 specific tax per avocado to be paid by consumensWith the tax, the equilibrium price of avocados isand the equilibrium quantity inO-74 units

The equilibrium is at demand equal to supply.To add tax we need to add the tax to the inverse demand…

Answered: Suppose the demand function for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the demand function for avocados is Q=104-40p + 20p₁ +0.01Y, where p is the price of avocados, p, is the price of tomatoes, and Y is average income, and the supply function for avocados is where p, is the price of fertilizer. Suppose p = $0.80, Y = $4,000, and p = $0.40. What is the equilibrium price and quantity of avocados? The equilibrium price of avocados is and the equilibrium quantity is Q=58+15p -20pf, and the equilibrium quantity is p=$2 Q = 80 units. (Enter your responses rounded to two decimal places.) Suppose the government charges a $2.20 specific tax per avocado to be paid by consumers. With the tax, the equilibrium price of avocados is p=$ Q= units.

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