Graph 9-3
-In Graph 9-3, the equilibrium price and quantity after the quota would be:
A)P₁, Q₁
B)P₁, Q₄
C)P₂, Q₂
D)P₂, Q₃

Question

Graph 9-3 
-In Graph 9-3, the equilibrium price and quantity after the quota would be:
A)P₁, Q₁ 
B)P₁, Q₄ 
C)P₂, Q₂ 
D)P₂, Q₃

Quizplus · Accepted Answer

After the quota is imposed, the supply curve shifts to the left from S to S'. The new equilibrium is at point E₂ where the demand curve intersects the new supply curve S'. The equilibrium price is P₂ and equilibrium quantity is Q₃. Therefore, the correct answer is D) P₂, Q₃.

Graph 9-3 -In Graph 9-3, the Equilibrium Price and Quantity After the Quantity