3. Vape Pens of Luxemstein (again!)

The government of Luxemstein is considering ways to reduce smoking using vape pens. Recall

from Midterm 1 the demand and supply of vape pens:

Q° = 100-2P

QS = 10 + 0.5P,

where QS and QD are measured in thousands of vape pens and P is measured in Euros. In

Midterm 1, you solved for the equilibrium price of 36 Euros and equilibrium quantity of 28,000

vape pens. You also found the price floor that would reduce consumption by half, which was

equal to 43 Euros.