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?    

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