The Following Graph Depicts the Market for CT Scanners in the United

question 7

Multiple Choice

The following graph depicts the market for CT scanners in the United States. Assume an initial equilibrium at D₁ and S₁ with price of $200,000 per machine.If the government places a $20,000 excise tax on each new scanner sold, the new equilibrium price will be

• A)at least $220,000.
• B)exactly $220,000.
• C)less than $220,000.
• D)there's not enough information to determine what the new price will be.

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Definitions:

National Defense

The government functions and mechanisms aimed at protecting a country against external aggression, threats, and maintaining sovereignty.

Free Market

An economic system where prices are determined by unrestricted competition between privately owned businesses, without excessive government control or intervention.

Externality

A consequence of an economic activity experienced by unrelated third parties; it can be either positive (beneficial) or negative (harmful).

Education's Benefit

Refers to the positive impacts of education on an individual's abilities, earning potential, and societal contributions.