Question

The Market for Hotel Rooms. Suppose with no tax the equilibrium price is $110 and the equilibrium quantity is 250. If the local government levies a tax of $30 per night on each hotel room rented, the new equilibrium price will equal _____ and the new equilibrium quantity will equal

Answer 1

Answer:

130, 150

Explanation:

Here, in the question the graph is missing. So, in the attachment the graph is attached.

Equilibrium is the state or condition, where there is balance or stable situation, which means that the opposing forces cancel each other force out and no changes or variations happen or occur.

In short, it is defined as the state where the quantity demanded is equal to the  quantity supplied, where there is no loss to the business.

From the graph, we could analyze that the new equilibrium price is 130 and at this price, the new equilibrium quantity is 150.