6. A record company estimates the industry demand for "hard alternative rock" albums to be: QD = 1000 -125-P. It estimates the industry supply to be: QS = 125-P. a. Given these estimates, what does it expect the industry output and price to be? b. A government commission announces that lyrics on "hard alternative rock" albums are offensive and should be banned. This causes consumers to purchase 20% more of such albums at any given price, compared to question 6a. What effect will this have on industry output and the price? c. Calculate the consumer surplus for parts a and b above. Are consumers better or worse off given the commission's recommendation?

ENGR.ECONOMIC ANALYSIS
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6. A record company estimates the industry demand for "hard alternative rock" albums to be: QD-1000
-125 P. It estimates the industry supply to be: QS = 125-P
a. Given these estimates, what does it expect the industry output and price to be?
b. A government commission announces that lyrics on "hard alternative rock" albums are offensive and
should be banned. This causes consumers to purchase 20% more of such albums at any given price,
compared to question 6a. What effect will this have on industry output and the price?
c. Calculate the consumer surplus for parts a and b above. Are consumers better or worse off given the
commission's recommendation?
Transcribed Image Text:6. A record company estimates the industry demand for "hard alternative rock" albums to be: QD-1000 -125 P. It estimates the industry supply to be: QS = 125-P a. Given these estimates, what does it expect the industry output and price to be? b. A government commission announces that lyrics on "hard alternative rock" albums are offensive and should be banned. This causes consumers to purchase 20% more of such albums at any given price, compared to question 6a. What effect will this have on industry output and the price? c. Calculate the consumer surplus for parts a and b above. Are consumers better or worse off given the commission's recommendation?
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