Suppose that the demand curve for apples is given by Qd = 160 - 10P, where Qd is the number of pounds demanded per year and p is the price per pound. The supply of apples can be described by Qs = 30 + 3P, where Qs is the number of pounds provided.
A. What is the equilibrium price? (Hint: At the equilibrium, quantity demanded and quantity supplied are equal, Qd = Qs.)
B. What is the equilibrium quantity supplied and demanded?
C. Calculate the consumer surplus at the equilibrium price.
D. Now suppose that the government imposes a tax of $13 per each pound sold, paid by the consumers. In this case, what are the price and the consumer surplus?