PRICE (Dollars per donut)QUANTITY (Donuts)SupplyDemandDemandIf donuts are a normal good, this will cause the demand for donuts toSupplyNow suppose Congress passes a new tax that decreases the income of Philadelphia residents.Grade It NowSave & ContinueContinue without saving 8. Shifts in supply or demand IThe following graph shows the market for donuts in Philadelphia, where there are over 1,000 donut shops at any given moment. Suppose themunicipal government, in an attempt to attract new residents, issues $1,000 move-in vouchers to each new household that moves to Philadelphia. Asa result, many new families move into the city.Show the effect of this change on the market for donuts by shifting one or both of the curves on the following graph, holding all else constant.Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps backto its original position, just drag it a little farther.E (Dollars per donut)11111Supply40Demand10Supply

Demand curve represents quantity demanded corresponding to different price levels. It is downward…

Answered: Now suppose Congress passes a new tax…

Now suppose Congress passes a new tax that decreases the income of Philadelphia residents. If donuts are a normal good, this will cause the demand for donuts to Grade It Not

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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