Figure 6-15
-Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

Question

Figure 6-15 
-Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

Quizplus · Accepted Answer

A tax of $5 per unit will decrease the equilibrium quantity, but it will not drop below 25 units. The new equilibrium quantity will be between 25 and 50 units as the tax shifts the supply curve upward, reducing the quantity supplied and demanded.

Figure 6-15 -Refer to Figure 6-15.Suppose a Tax of $5 Per Unit