Use the table below to answer the following questions.
Table 6.5.1
The Market for a Prohibited Good
-Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on buyers,the new price is ________ and the new equilibrium quantity is ________ units.
A)$8;400
B)$8;300
C)$7;300
D)$9;300
E)$8;200

Question

Use the table below to answer the following questions.
Table 6.5.1
The Market for a Prohibited Good 
-Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on buyers,the new price is ________ and the new equilibrium quantity is ________ units.
A)$8;400 
B)$8;300 
C)$7;300 
D)$9;300 
E)$8;200

Quizplus · Accepted Answer

The $2-per-unit cost effectively shifts the demand curve downward by $2 at each quantity, leading to a new equilibrium where the price that clears the market is lower and the quantity demanded and supplied is reduced. The correct new price and quantity are $7 and 300 units, respectively, as this adjustment would decrease both the willingness to pay by buyers (due to the additional cost) and the equilibrium quantity to where the new demand curve intersects the supply curve.

Use the Table Below to Answer the Following Questions