Question

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 = 400 - 10 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 = 60 + 5 P - 2 W

Given that Y = 10,000 and W = 6, what is the:


1. Equilibrium price?

Number




2. Equilibrium quantity?

Number




Suppose that income increases to 20,000 and W remains constant. What is the new:


3. Equilibrium price?

Number




4. Equilibrium quantity?

Number




Assuming that income remains constant at 20,000 and W increases to 11, what is the new:



5: Equilibrium price?

Number




6. Equilibrium quantity?

Answer 1

1. 24.13
2. 168.67
3. 24.8
4. 172
5. 25.47
6. 165.33