Figure 6-11

-Refer to Figure 6-11. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Question

Figure 6-11
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-Refer to Figure 6-11. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Quizplus · Accepted Answer

The imposition of a tax shifts the supply curve upwards by the amount of the tax, leading to a new equilibrium where the quantity is less than the original equilibrium quantity (100 units) but more than the quantity at which the tax is imposed (60 units), hence between 60 units and 100 units.

Figure 6-11 ​

Figure 6-11