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Homework answers / question archive / Suppose the demand function for avocados is Q = 104 - 40p + 2Opt + 0
Suppose the demand function for avocados is
Q = 104 - 40p + 2Opt + 0.01Y, where p is the price of avocados, lot is the price of tomatoes, and Y is average income, and the supply function for avocados is Q = 58 + 15p - 20pf,
where pf is the price of fertilizer. Suppose pt = $0.80, Y = $4,000, and pf = $0.40. What is the equilibrium price and quantity of avocados? The equilibrium price of avocados is
and the equilibrium quantity is
Q=
P = $
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 = $
and the equilibrium quantity is
units.
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