Question
The demand for product X depends on the price of product X as well as the...
The demand for product X depends on the price of product X as well as the average household income (Y) according to the following relationship
Qdx = 750 - 5 P + 0.001Y
The supply of product X is positively related to own price of
product X and negatively dependent upon W, the price of some input.
This relationship is expressed as:
Qsx = 130 + 20 P - 4 W
Given that Y = 40,000 and W = 8, what is the:
1. Equilibrium price?
2. Equilibrium quantity?
Suppose that income increases to 50,000 and W remains constant. What is the new:
3. Equilibrium price?
4. Equilibrium quantity?
Assuming that income remains constant at 50,000 and W increases to 13, what is the new:
5: Equilibrium price?
6. Equilibrium quantity?
Homework Answers
Answer #1
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