New market price

Posted by ranjankumarnayak5 on May 05, 2016; 4:03pm
URL: http://discussion-forum.276.s1.nabble.com/New-market-price-tp7600402.html

Consider market for a good in partial equilibrium analysis where supply is perfectly price
Inelastic and demand is perfectly price elastic. Market price is Rs. 60 when no tax is levied.
Ad volerm excise duty of 25 % is now levied. New market price,
(A) goes up by 25 %
(B) goes up by 20 %
(C) remains unchanged
(D) does not exist, as there is no market equilibrium