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Compute the equilibrium price and quantity for a given price 

The demand for product 'X' is given by

Px= 25 - 0.005Q + 0.15Py

where Px represents price in dollars per unit, Q represents sales in pounds per week, and Py, represents the selling price of a related product, 'Y', in dollars per unit.

The supply or product 'X' is given by:

Px = 5 + 0.004Q

a)      Determine the equilibrium price and quantity for 'X' when T sells for $10 per unit.

b)      Determine the equilibrium price and quantity for 'X' when 'Y' sells for $15 per unit.

c)       Plot the functions and results for a) and b) above

d)  Are 'X' and 'Y' substitutes or complements? describe.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M917495

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