Problems[1]

Problems[1] - s 1. Suppose the supply function for product...

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s 1. Suppose the supply function for product X is given by Q x = -50 + 0.5 P x - 5P z . a. How much of product X is produced when P x = \$500 and P z = \$30? b. How much of product X is produced when P x = \$50 and P z = \$30? c. Suppose P z = \$30. Determine the supply function and inverse supply function for good X. Graph the inverse supply function. 2. The demand for good X is given by d Q x = 1,200 – ½ P x + 1/4P y - 8 P z + 1/10 M Research shows that the prices of related goods are given by P y = \$5,900 and P z = \$90, while the average income of individuals consuming this product is M = \$55,000. b. Indicate whether goods Y and Z are substitutes or complements for good X. c. Is X inferior or a normal good? d. How many units of good X will be purchased when P x = \$4,910? e. Determine the demand function and inverse demand function for good X. Graph the demand curve for good X. 3. Suppose demand and supply are given by D s Q x = 7 – ½ P x and Q x = ¼ P x - ½ a. Determine the equilibrium price and quantity. Show the equilibrium graphically.

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This note was uploaded on 01/22/2011 for the course BUS 612003 taught by Professor Spiess during the Spring '10 term at Lewis University .

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Problems[1] - s 1. Suppose the supply function for product...

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