Quèstion 24Figure #2`price10D after ias2030405060Refer to Figure #2. Before the tax is imposed, what is the equilibrium price of the market?$7$6O $5O $3

Answered: Figure #2 price 10 9. 7. D after tAi 10…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Quèstion 24
Figure #2
`price
10
D after ias
20
30
40
50
60
Refer to Figure #2. Before the tax is imposed, what is the equilibrium price of the market?
$7
$6
O $5
O $3

Expert Solution

Step 1

Equillibrium price- it is the only price(P) where on both the producers & consumer agree

Equillibrium quantity- it is the is the intersection of supply(SS) & demand (DD), at this point there is no surplus or shortage, the amount that is being produced is exactly the amount that the individuals consume.

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