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Until July 2017, Minnesotans could not legally buy alcohol in the state of
Minnesota. Tipplers either planned ahead or travelled out of state to purchase
their beer, wine, and liquor.
During the debate to legalize Sunday liquor sales, proponents argued that an
estimated 77% of the Minnesota population lives within 30 miles of a bordering
state with legal Sunday liquor sales. An estimated $7.6 million to $10.6 million in
tax revenues are lost from those sales prior to July 2017. Sunday is a normal
shopping day in Minnesota for its citizens.
Opponents argued that legalizing Sunday sales of liquor simply increase the
costs to liquor stores since they would be open one more day per week but still sell
the same amount. Higher costs mean higher prices. Right now, Minnesota has
lower liquor prices on average than neighboring states (about 10% lower). And,
Minnesota has lower than average rates of alcohol-related abuse and accidents than
our neighbors.
Questions:
1. (8 points) For liquor stores near the Minnesota border,
a. (3 points) Draw the weekly demand and supply curves with the ban.
b. (2 points) If the ban is lifted what happens to the QS in those stores?