Question

Table 9A.5 Refer to Table 9A.5. If a $2?per?unit cost of breaking the law is imposed on sellers, the new price is $________ and the new equilibrium quantity is ________ units.

A) 8; 400
B) 8; 300
C) 7; 300
D) 9; 300
E) 8; 200

Answer 1

Unable to provide a specific answer due to missing information, typically an imposed cost on sellers leads to a higher equilibrium price and a lower equilibrium quantity.

Step-by-step explanation:

To determine the new equilibrium price and equilibrium quantity after a cost of breaking the law is imposed on sellers, we need to assess how this cost affects the supply curve. Unfortunately, without Table 9A.5, we cannot provide a specific numerical answer. However, for illustrative purposes, if a firm originally has an equilibrium price of $8 at a quantity of 1,800 units and a $2 per unit cost is added, the supply curve shifts upward by $2. This increase in cost will generally result in a higher equilibrium price and a lower equilibrium quantity as the firm needs to cover additional expenses. In the scenarios provided, this follows the pattern where with additional costs, such as those from externalities, the price rises, and the quantity produced falls, reducing the related external downsides, such as pollution.