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28 Sep 2019
We have the follwing equations:
Demand Curve: Qxd= -1,450 - 25Px + 12.5Py + .2Inc
Supply Curve: Qxs = -100 + 75Px - 25Py - 12.5Pz + 10R
Where: Px = Price of Good X
Q = Quantity
Inc = Income
R = Rainfall
Py = Price of Product Y
Pz = Price of Product Z
a) Suppose the prices of goods Y and Z are $5 and $8 respectively and Inc = 8,000 and R = 20. Calculate the equilibrium price and quantity.
b) Is the product a normal or inferior good? Explain. -you do not have the indifference curves here, so must use another technique that gives you the normality or inferiority of the good.
c) Discuss the relationship of products Y and Z to our good.
d) Comment on whether a surplus or shortage exists when Px = $1.25
We have the follwing equations:
Demand Curve: Qxd= -1,450 - 25Px + 12.5Py + .2Inc
Supply Curve: Qxs = -100 + 75Px - 25Py - 12.5Pz + 10R
Where: Px = Price of Good X
Q = Quantity
Inc = Income
R = Rainfall
Py = Price of Product Y
Pz = Price of Product Z
a) Suppose the prices of goods Y and Z are $5 and $8 respectively and Inc = 8,000 and R = 20. Calculate the equilibrium price and quantity.
b) Is the product a normal or inferior good? Explain. -you do not have the indifference curves here, so must use another technique that gives you the normality or inferiority of the good.
c) Discuss the relationship of products Y and Z to our good.
d) Comment on whether a surplus or shortage exists when Px = $1.25
Insha FatimaLv10
28 Sep 2019
