5. Consider the following demand and supply schedules in the market for basketballs in country A.

Demand Supply Price 700 0 $2.00 600 0 $2.50 500 100 $3.00 400 200 $3.50 300 300 $4.00 200 400 $4.50 100 500 $5.00

a. Find the initial equilibrium price and quantity and draw the graph.

b. Suppose the government imposes a $0.5 per unit tax on the producers of basket balls. Find the new equilibrium price and quantity. Draw the graph.

c. Suppose the government changes the tax by switching it from the producer to the consumer. What will be the new equilibrium price and quantity? Draw the graph.