What market outcome should on expect to observe

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Reference no: EM133487175

Case: Consider a mid-sized southwestern college town where the demand for liquor is described by the equation Qd=1500 - 75P, where Qd is 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-225 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 Last month, the local government repealed part of its restricting laws on the public consumption and sale of liquor.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 $16.

Consider that one month after the repeal went into effect (and the market is in equilibrium) more sellers entered the liquor market and, convenience stores and local bars became less strict with checking identification cards.

Given these observations, what market outcome should on expect to observe in the market for liquor?

Reference no: EM133487175

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