Use the market demand on #3 and identify the range of price that will give a/anD. perfectly elastic demandE. perfectly inelastic demand Assume equations 1 and 2 below were estimated from the data gathered that will representthe demand and supply functions respectively of an individual buyer and seller respectivelyfor product X.Eq. 1Eq. 2Qdx = 65,000 – 11.25Px + 15P, – 3.751 + 7.5AQsx = 7,500 + 14.25Px – 15P, – 3.75Cwhere Px – price of product X; Py – price of product Y; I – average consumer's income; Aadvertising expenditure; Pz – price of product Z; and C – cost of production.Use the following additional information: the price of a related product, Y, is P41.25; theaverage consumer's income is P12,000; advertising expenditure is P2,500; the price of productZ is P90; and the cost of production is P1,200. There are 30 identical buyers and 50 identicalsellers in the market for product X.

We have been given the individual demand function Qx=65,000-11.25Px+15Py-3.75I+7.5A ...…

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Use the market demand on #3 and identify the range of price that will give a/an D. perfectly elastic demand E. perfectly inelastic demand

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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