Exhibit 7-10
-Refer to Exhibit 7-10. What would the new equilibrium quantity be if the government assessed on producers a tax of $3 per unit sold?
A)55
B)40
C)50
D)60
E)45

Question

Exhibit 7-10 
-Refer to Exhibit 7-10. What would the new equilibrium quantity be if the government assessed on producers a tax of $3 per unit sold?
A)55 
B)40 
C)50 
D)60 
E)45

Quizplus · Accepted Answer

With a tax of $3 per unit sold, the cost of production for the producers will increase. This will shift the supply curve upwards, causing a decrease in the quantity supplied. The new equilibrium point will be where the new supply curve intersects with the original demand curve, which is at a quantity of 50 units.

Exhibit 7-10 -Refer to Exhibit 7-10. What Would the New Equilibrium Quantity