Answer to Question #343918 in Macroeconomics for Jasmine

Question

Hello!

Please guide me as to how is 'C' the answer for the following question.

In the market for a good the quantity supplied (QS) and the quantity demanded (QD) are given by QS = P – 30 and QD = 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?

A It will fall by $2.

B It will fall by $6.

C It will rise by $2.

D It will rise by $6.

Answer 1

C. It will rise by $2.