Figure7-1The Supply and Demand for Hotel Rooms in Potterville In the absence of taxes, the equilibrium price (P_E) of hotel rooms is $80 a night, and the equilibrium number (Q_E) of rooms rented is 10 000 per night, as shown by point E. The supply curve, S, shows the quantity supplied at any given price, pre-tax. At a price of $60 a night, hotel owners are willing to supply 5000 rooms, point B. But post-tax, hotel owners are willing to supply the same quantity only at a price of $100: $60 for themselves plus $40 paid to the city as tax.