Figure 6-10

-Refer to Figure 6-10.What is the equilibrium price in the market before the tax is imposed

Question

Figure 6-10
 
-Refer to Figure 6-10.What is the equilibrium price in the market before the tax is imposed

Quizplus · Accepted Answer

The equilibrium price in the market before the tax is imposed is where the demand and supply curve intersect, which is at $5.00. This can be seen from the point labeled E in the graph. As the tax shifts the supply curve up by $1.00, the new equilibrium price would be where the demand curve intersects the new supply curve, at point F. The new price would be $6.00 ($5.00 + $1.00 tax), which is shown by the horizontal line labeled $6.00 in the graph.

Figure 6-10 -Refer to Figure 6-10.What Is the Equilibrium Price in the Equilibrium