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Figure: The Market for Yachts
-(Figure: The Market for Yachts) Look at the figure The Market for Yachts. A price _____ of _____ will bring about the same price and output in the market for yachts as would an excise tax of $30,000.

Question

Use the following to answer questions:
Figure: The Market for Yachts 
-(Figure: The Market for Yachts) Look at the figure The Market for Yachts. A price _____ of _____ will bring about the same price and output in the market for yachts as would an excise tax of $30,000.

Quizplus · Accepted Answer

A price floor of $140,000 would have the same effect as an excise tax of $30,000 because it would raise the price to the same level, reducing the quantity demanded to the same extent as the tax.

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