Suppose gold (G) and silver (S) are substitutes for each other because both serve as hedges against inflation. Suppose also that the supplies of both are fixed in the short run (Qe = 90 and Qg = 300) and that the demands for gold and silver aregiven by the following equations:PG = 990 - Qg +0.50PSandPs = 630 - Qg +0.50PG-What the the equilibrium prices of gold and silver?The equilibrium price of gold is $ and the equlibrium price of siliver is $. (Enter your responses rounded to two decimal places.)

Following information is given in short run: QG = 90 QS = 300 Ps = 630 - Qs + 0.5PG Ps = 630 - 300 +…

Answered: Suppose gold (G) and silver (S) are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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1) Suppose gold (G) and silver (S) are substitutes for each other because both serve as hedges against inflation. Suppose also that the supplies of both are fixed in the short run (Qg = 75 and Qs = 300) and that the demands for gold and silver are given by the following equations: PG = 975 – QG + 0.5Ps and Ps = 600 – Qs + 0.5PG. What are the equilibrium prices of gold and silver?

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