Business, 16.10.2020 14:01, samiiegarciia

The market for whisky in Scotland is described by the following demand and supply equations: Demand:
D=80−P
Supply:
S=−40+2P

where P is the price of a liter of whisky, and is the number of liters sold per week, in thousands. Suppose the Scottish government mandates a price of £60 per liter.

Required:
Is the market in equilibrium?

a. The market is in equilibrium because at £60 per liter, quantity supplied equals quantity demanded.
b. The market is in equilibrium because the price of £60 per liter is a fair price for society.
c. The market is not in equilibrium because any price set by the government cannot be an equilibrium price.
d. The market is not in equilibrium because at £60 per liter, quantity supplied does not equal quantity demanded.

Answers: 2

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The market for whisky in Scotland is described by the following demand and supply equations: Demand...