3. Assume equations 1 and 2 below were estimated from the data gathered that will represent the demand and supply functions respectively of an individual buyer and seller respectively for product X. Eq. 1 Eq. 2 Qdx = 65,000 – 11.25Px + 15P, – 3.751 +7.5A Qsx = 7,500 + 14.25Px – 15P, – 3.75C where Px - price of product X; Py - price of product Y; I – average consumer's income; A advertising 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; the average consumer's income is P12,000; advertising expenditure is P2,500; the price of product Z is P90; and the cost of production is P1,200. There are 30 identical buyers and 50 identical sellers in the market for product X.

3. Assume equations 1 and 2 below were estimated from the data gathered that will represent the demand and supply functions respectively of an individual buyer and seller respectively for product X. Eq. 1 Eq. 2 Qdx = 65,000 – 11.25Px + 15P, – 3.751 +7.5A Qsx = 7,500 + 14.25Px – 15P, – 3.75C where Px - price of product X; Py - price of product Y; I – average consumer's income; A advertising 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; the average consumer's income is P12,000; advertising expenditure is P2,500; the price of product Z is P90; and the cost of production is P1,200. There are 30 identical buyers and 50 identical sellers in the market for product X.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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