Assignment1_Q1

Assignment1_Q1 - 1b. Substitute. Rearrange the demand...

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1a. At P y = 10, The demand curve is: P x = 25 - 0.005Q + 0.15 (10) P x = 26.5 -0.005Q Q = 5300 – 200P x (1) The supply curve is: P x = 5 + 0.004Q (2) Substitute (1) to (2), P x = 5 + 0.004 (5300 – 200P x ) P x = 5 + 21.2 – 0.8P x 1.8P x = 26.2 Therefore, P x = $14.56 Q = 5300 – 200 (14.56) = 2389 units per week
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Unformatted text preview: 1b. Substitute. Rearrange the demand curve: Q = 200 (25 P x + 0.15 P y ) The positive sign of P y of the demand curve indicates the increase of the price of Y will increase the quantity of X....
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This note was uploaded on 11/15/2010 for the course ECON ECON1001 taught by Professor Ka-fuwong during the Spring '10 term at HKU.

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