Question: 1.6.9 The United Kingdom had a drinking problem. Brit ish per capita consumption of alcohol rose 19% between 1980 and 2007, compared with a 13%

1.6.9 The United Kingdom had a drinking problem. Brit ish per capita consumption of alcohol rose 19%

between 1980 and 2007, compared with a 13%

decline in other developed countries. Worried about excessive drinking among young people, the British government increased the tax on beer by 42% from 2008 to 2012. Under what conditions will this spe cific tax substantially reduce the equilibrium quan tity of alcohol? Answer in terms of the elasticities of the demand and supply curves.

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