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Q. Numerous "hookah bars" at which patrons can pay to utilize water pipes to smoke regular also flavored tobaccos have popped-up around the country. Hookah bars are particularly popular with college student's
a. Assume which the market for the service of hookah bars is in long-run equilibrium. Then two events occur: (1) more cities end regulation which had generated fixed cost for hookah bars also (2) many nonstudent adults discover previous unknown preferences for the services of hookah bars. Utilize diagrams to trace through the short-run effects on the market price of hookah bars services, the marginal revenue also marginal cost of these services at a typical hookah bar also the equilibrium quantity of services provided both by a typical hookah bar also by the hookah bar industry.
b. Redraw your diagrams Elucidate how the situation at conclusion of your answer to part (a). Utilize these new diagrams to Elucidate the long-run which will take place in this industry.
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This would be ideal because he would have the same number of pretzels as he would soda leaving no money left to spend.
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