Suppose That a Market Is Initially in Equilibrium

question 55

Multiple Choice

Suppose that a market is initially in equilibrium.The initial demand curve is The initial supply curve is Suppose that the government imposes a $3 tax on this market.How much of this $3 is paid for by producers?

• A) $0.
• B) $1.
• C) $1.50.
• D) $2.

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Definitions:

Substitutes

Products or services that can replace each other in use, causing the demand for one to increase when the price of the other rises.

Complements

Goods or services that are used together with another, such that the demand for one increases when the price of the other decreases.

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