Given the following demand and supply functions: Qdx= 1,700-4Px+0.5Py-0.5Pz+0.004I Qsx = 400 + 16 Px -...
Given the following demand and supply functions:
Qdx= 1,700-4Px+0.5Py-0.5Pz+0.004I
Qsx = 400 + 16 Px - 4 W - 0.5 R
Where:
Price of Y (Py) = 100
PriceofZ(Pz)= 60
Income (I) = 4,600
Wages (W) = 11
Rent (R) = 130
1. What is the equilibrium price?
2. What is the equilibrium quantity?
3. What is the price elasticity of demand (use the point method and include a negative sign)?
4. What is the degree of elasticity?
5. What is the income elasticity of demand (use the point method)?
6. What type of good is indicated by the coefficient in part 5?
Homework Answers
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Given the following demand and supply functions:
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