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John Barks owns Barks Computer Screens Inc. and wants to identify the supply and demand for screens in his market. The company can produce large screens called Wides or small screens called Squares. The production processes are interchangeable, and production can be adjusted depending on market conditions. The demand for both products is highly elastic in terms of price elasticity, and customers perceive the two products as close substitutes for each other.
Barks needs some help in completing his market analysis. Therefore, he hires you as a consultant and provides you with the results of his analysis. He has found that the functions for supply and demand in his market are:
Qd = -1650 - 35P + 12.5Pw + 0.1YQs = -120 + 75P - 30Pw + 13PL + 12R
Where:
Qd = DemandQs = SupplyPw = Average price of WidesY = Income in his marketPL = Price of laborR = Is the average humidity level measured in hums
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