Consider the market for alcoholic beverages in Hoboken, where we will (for simplicity) aggregate across all the various categories and types of beverages. Market analysis and research has provided the following estimated supply and demand relationships describing the provision and consumption of alcohol on a typical evening: Supply: = 250 + 100 Demand: = 7500 250

1) What is the equilibrium price and quantity of alcohol consumed in a typical Hoboken night?

2)Suppose that the city council of Hoboken is considering a restrictive ordinance that will reduce the number of liquor licenses in the city. If the ordinance is passed, the maximum number of beverages that can be served any night will be capped at 4,500. What will be the resulting market price and quantity?

3) Under an alternative proposal, the cap on the number of beverages served would be lowered to 2,500. What will be the resulting market price and quantity?

4) Based on 1-3, how much do you think the Hoboken Bar Owners' Association would be willing to spend on bribes to corrupt New Jersey politicians (i.e., political "lobbying" efforts), and in favor of what sort of policy?