For decades, the mob ran a “numbers game” in which participants who matched three numbers chosen at random would win a prize. In the 1970s, state governments began authorizing state lottery commissions; those commissions typically offered games similar in structure to the numbers game. Using supply and demand analysis:
a. Predict the effect of the creation of state lotteries on the number of people playing numbers-type games.
b. Predict the effect of the creation of state lotteries on the number of people playing mob-run numbers games.
c. Predict the effect of the creation of state lotteries on the price of playing a numbers-type game.
d. Numbers games are unusual in that tickets don’t typically vary in their nominal price — most tickets sell for exactly $1. Given that the nominal price is fixed, how might the price change you indicated in (c) be achieved?