Suppose the supply curve for apples is given by Qs = 100 + 30p, and the demand curve is given by Qd = 300 10p.

(a) What is the equilibrium price and output of apples?

(b) Draw the market for apples. Be sure to label everything.

(c) What is the elasticity of demand at the equilibrium price you solved for in part (a)?

(d) Calculate the elasticity of supply at the equilibrium price you solved for in part (a).

(e) Using the formula from class, if the government imposes a specific tax of $4 per unit, then how much will price increase by?

(f) Draw the tax wedge as well as the post-tax prices on your diagram from (b). What will the quantity traded be with the tax.

(g) Who bears a larger burden of the tax? Why?