The table gives the demand and supply schedules for an illegal drug.
Price
Quantity Quantity
(dollars per
demanded supplied
unit)
(units per day)
50
500
300
60
400
400
70
300
500
80
200
600
90
100
700
a. If there are no penalties on buying or selling the drug, what is the price and how many units are consumed?
b. If the penalty on sellers is $20 a unit, what are the price and quantity consumed?
c. If the penalty on buyers is $20 a unit, what are the price and quantity consumed?