Suppose that demand for oranges is given by the following equations: Q= -200P + 1,000 With quantity(Q) measured in oranges per day and price(P) measured in dollars per orange. the supply curve is given by: Q= 600P

a. Compute the equilibrium price and quantity of oranges.

b. Suppose that an exercise tax of 40 cents apiece is imposed on oranges. What are the new supply and demand curves? What is the new equilibrium price and quantity of oranges? What is the new post-tax price from the supplier's point of view? Illustrate the answer by drawing the supply and the demand curves.

c. Repeat the exercise for 40 cents sales tax instead of exercise tax.

d. Suppose that an exercise of 20 cents apiece and a sales tax of 20 cents are imposed simultaneously, answer again all the questions in part (b).

e. Explain what can be learned about the impact of sales for excise tax on buyers and sellers according to the rule of government and their actual impact on buyers and sellers.