Final answer:
A new law that prohibits an increase in prices in a market that is currently in equilibrium means that prices cannot be raised above the existing equilibrium level. It aims to protect consumers and maintain market stability.
Step-by-step explanation:
In economics, equilibrium refers to a state where the demand and supply of a product are in balance, resulting in a stable price and quantity. When a new law prohibits an increase in prices in a market that is currently in equilibrium, it implies that prices cannot be raised above the existing equilibrium level.
For example, let's say the equilibrium price of a product is $10. If the new law is implemented, sellers will not be allowed to charge a price higher than $10. This prevents any distortion of the market and ensures that prices remain consistent with the demand and supply.
Overall, such a law aims to protect consumers by preventing unfair price hikes and maintaining market stability.