Suppose the coffee market in the US is given by the following equations for supply and demand: QS = 9 + 0.5p QD = 12 p where Q is the quantity in millions of tons per year and p is the price per pound

a) Calculate the equilibrium price and quantity of coffee

b) uppose a tax of $0.75 is imposed on coffee producers. Calculate the new equilibrium price and quantity. What is the amount of the tax burden on consumers (hint: by how much has the price per pound consumers pay change?

c) Find the consumer and producer surplus before the tax is imposed. Find the consumer and producer surpluses after the tax is imposed, the tax revenue and the deadweight loss