Question

In the fall, the pie makers of Redbud, Vermont love to purchase apples, picked from the local apple orchards, to make apple pies. Ten would be happy to pay up to $6 for a bushel of apples and ten more would pay as much as $8. Each of the thirty children living in Redbud would be willing to pick one bushel of apples if they are paid at least $5 to do so. Redbud is trying to raise money to support its baseball team (the Redbud raiders) and has decided to tax pie makers $2 for every bushel of apples they purchase. How will this change the competitive equilibrium in the apple market

Answer 1

Negatively

Explanation:this will change the competitive equilibrium negatively because there is an increase in the price at which bushel of apples are purchased causing those willing to pay $6 pay $8, therefore paying the same price as those willing to pay $8