20 18 16 14 12 10 8 D 4 2 0 1 2 3 4 5 6 7 8 9 10 11 12 Quantity Suppose that supply and demand at a market are represented by curves S and D at the figure above (notice that the vertical axis grid has increments of $2) and then a tax of $6 dollars per unit is imposed on buyers. What is the new equilibrium market price? $12 $16 $8 $10 Price
20 18 16 14 12 10 8 D 4 2 0 1 2 3 4 5 6 7 8 9 10 11 12 Quantity Suppose that supply and demand at a market are represented by curves S and D at the figure above (notice that the vertical axis grid has increments of $2) and then a tax of $6 dollars per unit is imposed on buyers. What is the new equilibrium market price? $12 $16 $8 $10 Price
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
100%
![20
18
16
14
12
10
8
D
4
2
0 1 2
3
4
5
6 7
8
9.
10 11 12
Quantity
Suppose that supply and demand at a market are represented by curves S and D at
the figure above (notice that the vertical axis grid has increments of $2) and then a
tax of $6 dollars per unit is imposed on buyers.
What is the new equilibrium market price?
$12
$16
$8
$10
Price
LO](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4c6c3461-7492-496f-98bc-6ef78f2648e2%2Fe508ad75-fda4-4e90-8147-f601de97d670%2Fmic5ki_processed.png&w=3840&q=75)
Transcribed Image Text:20
18
16
14
12
10
8
D
4
2
0 1 2
3
4
5
6 7
8
9.
10 11 12
Quantity
Suppose that supply and demand at a market are represented by curves S and D at
the figure above (notice that the vertical axis grid has increments of $2) and then a
tax of $6 dollars per unit is imposed on buyers.
What is the new equilibrium market price?
$12
$16
$8
$10
Price
LO
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
Step 1
Answer:
According to the above figure, a tax of $6 on the demand curve shifts the demand curve down by 6 units. The new equilibrium occurs at point E. The new equilibrium price is $10.
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