Answer to Question #138378 in Macroeconomics for qwer

Question #138378

Where Px is the price of ethyl alcohol, Pr represents the price of Isopropyl Alcohol, and Pw is the price of input used to produce ethanol. Given that the amount of ethyl alcohol sells at P40 per unit, isopropyl alcohol is sold for P35 per unit; and the price of inputs is P2,000. How much ethyl alcohol is produced?

3. Due to the health emergency crisis that recently emptied the coffers of the National Government, the privatization bureau is planning to privatize hundreds of government enterprises and properties. Suppose that you are one of the head-researcher of a government enterprise to be privatized, and the Director asked you the price and quantity that may sustain if the economy returned to normalcy. The best estimate for the demand-supply is at Qd = 100 - 10P and Qs = 10 – 5P. Find the equilibrium price and quantity.

Expert's answer

2. We need to have some additional information to find how much ethyl alcohol is produced.

3. The equilibrium price and quantity are:

Qd = Qs,

"100 - 10P = 10 - 5P,"

P = 18,

Q = -80 units.