Problem
The equation for the demand for energy drinks is: and for the supply. Where QD and QS are quantity demanded and supplied respectively and P is price of energy drinks. Answer the following with the aid of graphs:
i. Find the equilibrium price and quantity for energy drinks and draw the graph for the market.
ii. What will happen to the market of energy drinks if the price of a pocket of crisp increased (assuming that they are complementary goods)?
iii. What will happen to the market if the government decides to implement a minimum price of £4 per energy drink?