Figure 4-25

-Refer to Figure 4-25.The equilibrium price before the tax is imposed is
A)P₁.
B)P₂.
C)P₃.
D)impossible to determine from the figure.

Name: Figure 4-25 -Refer to Figure 4-25.The equilibrium price before the tax is imposed is A)P₁. B)P₂. C)P₃. D)impossible to determine from the figure.
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Question

Figure 4-25
 
-Refer to Figure 4-25.The equilibrium price before the tax is imposed is
A)P₁. 
B)P₂. 
C)P₃. 
D)impossible to determine from the figure.

Quizplus · Accepted Answer

The equilibrium price before the tax is imposed is P₁, because it is the price at which the quantity supplied equals the quantity demanded.

Figure 4-25 -Refer to Figure 4-25.The Equilibrium Price Before the Tax Is