Consider a mid-sized southwestern college town where the demand for liquor is described by the equation Qp = 1500 - 75P, where Qp is the the quantity of bottles of liquor per month, and P is the price (in dollars) for one bottle of liquor. The supply of liquor is described by the equation: Qs = 50P - 325 were Qs is the quantity of bottles of liquor per month. Last month, the local government repealed part of its restricting laws on the public consumption and sale of liquor. As a result of this change, the market for liquor is adjusting and the current market price is $13. (Question 8 of 8) Consider that one month after the repeal went into effect (and the market is in equilibrium), some sellers leave the liquor market. At the same time a report by state health officials about the sudden surge in the number of new alcohol poisoning among college students who are first-time drinkers, led university officials to implement harsher punishment for college students found with alcohol or blood-alcohol levels greater 0.08%. As a result of these events, consider that with the harsher punishment implemented, the demand for liquor is described by the following equation: Qp = 1325 - 75P Furthermore, the supply for liquor is described by one of the following equations: Equation A: Qs = 50P - 425 or Equation B: Qs = 50P - 225 Using the new equations, what is the new equilibrium quantity?
Consider a mid-sized southwestern college town where the demand for liquor is described by the equation Qp = 1500 - 75P, where Qp is the the quantity of bottles of liquor per month, and P is the price (in dollars) for one bottle of liquor. The supply of liquor is described by the equation: Qs = 50P - 325 were Qs is the quantity of bottles of liquor per month. Last month, the local government repealed part of its restricting laws on the public consumption and sale of liquor. As a result of this change, the market for liquor is adjusting and the current market price is $13. (Question 8 of 8) Consider that one month after the repeal went into effect (and the market is in equilibrium), some sellers leave the liquor market. At the same time a report by state health officials about the sudden surge in the number of new alcohol poisoning among college students who are first-time drinkers, led university officials to implement harsher punishment for college students found with alcohol or blood-alcohol levels greater 0.08%. As a result of these events, consider that with the harsher punishment implemented, the demand for liquor is described by the following equation: Qp = 1325 - 75P Furthermore, the supply for liquor is described by one of the following equations: Equation A: Qs = 50P - 425 or Equation B: Qs = 50P - 225 Using the new equations, what is the new equilibrium quantity?
Chapter6: Elasticity
Section: Chapter Questions
Problem 12QP
Related questions
Question
Transcribed Image Text:Consider a mid-sized southwestern college town where the demand for liquor is described by the equation Qp = 1500 - 75P, where Qp is the the quantity of bottles of liquor per month, and P is the price (in
dollars) for one bottle of liquor. The supply of liquor is described by the equation: Qs = 50P - 325 were Qs is the quantity of bottles of liquor per month. Last month, the local government repealed part of its
restricting laws on the public consumption and sale of liquor. As a result of this change, the market for liquor is adjusting and the current market price is $13.
(Question 8 of 8)
Consider that one month after the repeal went into effect (and the market is in equilibrium), some sellers leave the liquor market. At the same time a report by state health officials about the sudden surge in
the number of new alcohol poisoning among college students who are first-time drinkers, led university officials to implement harsher punishment for college students found with alcohol or blood-alcohol
levels greater 0.08%.
As a result of these events, consider that with the harsher punishment implemented, the demand for liquor is described by the following equation: Qp = 1325 - 75P
Furthermore, the supply for liquor is described by one of the following equations: Equation A: Qs = 50P - 425 or Equation B: Qs = 50P - 225
Using the new equations, what is the new equilibrium quantity?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
