The equilibrium price and quantity of gasoline is $2.50 per gallon and equilibrium quantity is 15 million gallons. The price elasticity of demand is -0.5 and the price elasticity of supply is 1.
The state legislates that a sales tax of $0.10 per gallon should be imposed on oil companies as a measure to collect revenue and cut oil consumption.
a) Find the price and quantity sold in the market after the tax is imposed.