The price elasticity of demand for imported whisky is estimated to be -.20 over a wide interval of prices.?The federal government decides to raise the import tariff on foreign whiskey, causing its price to rise by 20 percent. Will sales (units sold) of whiskey rise or fall, and by what percentages? Please show work, best answer worth 10 points

I don't think that most of the people who look on here are going to respond! However, the price will go down as the units go down, but it will take a long time....the Federal government is slow, slow, slow.

Whiskey Bar

In general whenever the price of any freely traded commodity goes up the demand goes down as buyers will switch to other less expensive products that are equal in quality. Whiskey however may present a different problem. Single premium malt whisky, for example, is so unique in taste that people who fancy its particularity may well stay with the brand. In the upper brackets of Scotch drinkers, the cost of a case may not even be noticeable. Further down the economic scale, dedicated partisans of Dalmore may just decide to give up something else rather than change brands to a cheaper Scotch. For similar choices, one may well point to French wines which are usually more expensive than comparable American wine. It has been observed by real lovers of Scotch that if the government keeps raising the tariffs, ultimately vendors will be charging as much as the beverage is worth.