Consider the 6x6 system of equations below, of 3 goods and their respective demand and supply functions: Qd123 - 5P₁ + P₂ + P3 Qs1 = -8 + 6P₁ Qd2 15+ P₁ -3P2 + 2P3 Qs2-11 + 3P₂ Qd3 19 + P₁ +2P2 - 4P3 Qs3 = -5 + 3P3 a. Are these 3 goods substitutes or complements? Explain in detail using jargon.

Consider the 6x6 system of equations below, of 3 goods and their respective demand and supply functions: Qd123 - 5P₁ + P₂ + P3 Qs1 = -8 + 6P₁ Qd2 15+ P₁ -3P2 + 2P3 Qs2-11 + 3P₂ Qd3 19 + P₁ +2P2 - 4P3 Qs3 = -5 + 3P3 a. Are these 3 goods substitutes or complements? Explain in detail using jargon.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider the 6x6 system of equations below, of 3 goods and their respective demand
and supply functions:
Qd123 - 5P₁ + P₂ + P3
Qs1 = -8 + 6P₁
Qd2
15+ P₁ -3P2 + 2P3
Qs2-11 + 3P₂
Qd3 19 + P₁ +2P2 - 4P3
Qs3 = -5 + 3P3
a. Are these 3 goods substitutes or complements? Explain in detail using jargon.

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Step 1: Define market dynamics

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Step 2: Figure out good 1's relation with the other two goods

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Step 3: Figure out good 2's relation with the other two goods

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Step 4: Figure out good 3's relation with the other two goods

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