The demand and supply functions for two independent goods are given by:QD₁ = 502P₁ + P₂ and QD2 = 10 + P₁ - 4P₂Qs1 = -21 + P₁ and Qs2 = -10 + 5P₂Show that in equilibrium:R=2Find the equilibrium prices.

For market 1 in order to ensure equilibrium , QD1=QS1 50 -2P1 + P2 = -21 + P1 solving the LHS and…

The demand and supply functions for two independent goods are given by: QD150-2P₁ + P₂ and QD2 = 10 + P₁ - 4P₂ Qs1 = -21 + P₁ and Qs2 = -10 + 5P₂ Show that in equilibrium: 3 ¹²=28 Find the equilibrium prices.

The demand and supply functions for two independent goods are given by: QD150-2P₁ + P₂ and QD2 = 10 + P₁ - 4P₂ Qs1 = -21 + P₁ and Qs2 = -10 + 5P₂ Show that in equilibrium: 3 ¹²=28 Find the equilibrium prices.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 1WNG

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Question

The demand and supply functions for two independent goods are given by:
QD₁ = 502P₁ + P₂ and QD2 = 10 + P₁ - 4P₂
Qs1 = -21 + P₁ and Qs2 = -10 + 5P₂
Show that in equilibrium:
R=2
Find the equilibrium prices.

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