Question

In prisons money is forbidden, so people trade mackerel pouches, instead. Suppose that the demand for mackerel pouches is Q_D= 12-P, and the supply of mackerel pouches is Q_s= 2P. The equilibrium price and quantity is P=4 and Q=8. The government becomes aware the mackerel pouches trade in the prison and thus reinforces the guards so that one half of the mackerel pouches supply is seized and destroyed. Under the circumstances, the new supply and demand for the mackerel pouches is Q_s = P and Q_D = 6 - 1/2P. What is the new equilibrium price and quantity?

A. P=12, Q=24

B. P=6.9, Q=12.7

C. P=0.2, Q=12.6

D. P=7.2, Q=4.8

E. P=8.1, Q=4.6

F. P=36.9, Q=72.1

G. P=4, Q=8

Answer 1