2. The demand and supply functions for two interdependent goods X and Y are givenbyQDX = 7 − 4PX + 2PYQSX = −6 + 4PX − PYQDY = 1 + PX − PYQSY = −4 − PX + 2PY(a) Find the market equilibrium condition for each good. (b) Express the equilibrium conditions in the matrix form Ax = b.(c) Find the inverse of matrix A. (d) Given your result in part (c), calculate the equilibrium prices. (e) What is the equilibrium quantity for goods X and Y ?
2. The demand and supply functions for two interdependent goods X and Y are givenbyQDX = 7 − 4PX + 2PYQSX = −6 + 4PX − PYQDY = 1 + PX − PYQSY = −4 − PX + 2PY(a) Find the market equilibrium condition for each good. (b) Express the equilibrium conditions in the matrix form Ax = b.(c) Find the inverse of matrix A. (d) Given your result in part (c), calculate the equilibrium prices. (e) What is the equilibrium quantity for goods X and Y ?
Chapter12: The Partial Equilibrium Competitive Model
Section: Chapter Questions
Problem 12.3P
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Question
2. The demand and supply functions for two interdependent goods X and Y are given
by
QDX = 7 − 4PX + 2PY
QSX = −6 + 4PX − PY
QDY = 1 + PX − PY
QSY = −4 − PX + 2PY
(a) Find the market equilibrium condition for each good.
(b) Express the equilibrium conditions in the matrix form Ax = b.
(c) Find the inverse of matrix A.
(d) Given your result in part (c), calculate the equilibrium prices.
(e) What is the equilibrium quantity for goods X and Y ?
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