A-LevelEconomicsThe price system and the microeconomy9708/12 · May/June 2020 · Q131 Mark
In the market for a good the quantity supplied (Qₛ) and the quantity demanded (Qᴅ) are given by Qₛ = P – 30 and Qᴅ = 240 – 2P where P = price in dollars. A change in the tax on the good makes Qₛ = P – 36. How will the change affect equilibrium price?
AIt will fall by $2.
BIt will fall by $6.
CIt will rise by $2.
DIt will rise by $6.
✓ Correct answer
C: It will rise by $2.
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