Equilibrium price and the equilibrium quantity

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1. Solve the following equation for Qdx: Qdx = 1000 -2Px + 4Py -2Pz +10Yn -3Yi + 6T + 8#B + 4Exppy Given:

i. Py (price of substitute good y) = $10

ii. Pz (price of complementary good z) = $2

iii. Yn (income for a normal good) = $200

iv. Yi (income for an inferior good) = $20

v. T (Tastes) = 50 vi. #B (number of buyers) = 30

vii. Exppy (expectations of changes in prices and incomes) = $40

viii. Px (price of the good itself) = $100

2. Solve the following equation for Qsx: Qsx = 10 +2Px - 3C + 4 #S + 5 Tech Given:

i. C (Costs) = $100

ii. #S (number of sellers) = 500

iii. Tech (Technology factor) = 40

iv. Px (price of the good itself) = $100

3. You will probably notice that $100 is not the equilibrium price because Qdx is not equal to Qsx. The equilibrium price and quantity of x are jointly determined by supply and demand. Given the demand and supply equations in question 2 and question 3, solve for the equilibrium price and the equilibrium quantity. (Hint: you will know the answer is correct when the equilibrium quantity demanded equals the equilibrium quantity supplied)

Verified Expert

This assignment deals with the calculation of demand and supply functions, given the values of the various independent variables. Then using the demand and supply functions, we get to find the equilibrium price and quantity by equating these two functions.

Reference no: EM131426206

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