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Question 1 Table 1 below summarizes the price of one bottle of 200ml of an alcohol-based hand sanitizer and the various quantities sold from November 2019 to March 2020. After the outbreak of an unknown respiratory virus which spreads primarily through droplets generated when an infected person coughs or sneezes, health experts advised people to use alcohol-based hand sanitizers as an effective approach to kill the virus. Since then price of one bottle of 200ml alcohol-based hand sanitizer hiked to $9.5 per bottle in mid-March 2020 and about 21.000 boxes were sold per week. Table 1: Price and turn 0 alcohol-based hand sanitizer or November 2019 to March 2020 Price (per bottle of 200ml Quantity (bottle per week) Month/Year alcohol-based hand sanitizer November 20w 3_ December 2019 \".m Janu. 2020 -E- = March 2020 \"EE (a) The information in Tablel shows that the quantity demanded for alcohol-based hand sanitizer increases as its price increases. (i) Evaluate whether such information contradicts the law of demand and diagram the scenario by applying relevant supply and demand models. (ii) Assuming the market of alcohol~based hand sanitizer is perfectly competitive and all other factors are constant. predict what may happen to the price and quantity of a specied substitute good for alcohol-based hand sanitizer in the short run. (iii) In addition. discuss with diagrams all possible long-run equilibria for the market of alcohol-based hand sanitizer by applying relevant theories. {IS Marks) (b) Using the information provided and assuming supply of alcohol~bssed hand sanitizer during the period cannot be changed. (i) Compute the relevant elasticities (e.g.. price elasticity of demand. price elasticity of supply. cross elasticity of demand and income elasticity of demand) by using the data at two time points (November 2019 and March 2020). if you believe that a certain elasticity cannot be calculated or estimated with the provided information. explain specically why it cannot be estimated. (ii) For the elasticity (or elasticities) that you consider computable. interpret the computed elasticity and estimate the change in quantity based on a 20% change in the price of alcohol-based hand sanitizer. (IS Marks) carom umvalsm OF SOCIAL m (SUSS) P. '1 d9 E00201 (Onllne) Grant-bum Mimi-I'll (c) Supposed that: I the demand function for alcohol-based hand sanitizer last week was P2100- 0.08Q and ' the supply function was P=0.0ZQ. where P is measured in dollar (3) and Q is measured as number of bottles of alcohol-based hand sanitizer sold per week. (i) Calculate the price and quantity in equilibrium for the alcohol-based hand sanitizer market. Further supposed that government decided to regulate the market by setting a price ceiling at $10 per bottle. (ii) Evaluate the potential outcomes of such a price regulation irt terms of market efciency while assuming that there are no black markets for alcohol-based hand sanitizer. Be specific about the well-being of consumers. producers and the society by using proper diagrams. In addition, soon after the price regulation, a vaccine for the virus was invented which can reduce the risk of infection to a large extent. (iii) Discuss with diagrams potential changes in the market equilibrium after the invention of vaccine by assuming that the price ceiling at $10 and the supply of hand sanitizer remains the same. (15 Marks)