Suppose there are only two goods - Food (F) and Shelter (S). The demand equations for these two goods depend on their prices, pfand ps as follows:DE(PF.Ps) = 11 - 2.3pF - 2.0ps%3DDs(PF.Ps) = 13 - 1.1pf - 2.5psThe supply curves depend only on their own prices:S(pf) = PFS(ps) = 6.2psDetermine the equilibrium price of shelter.

Equating demand and supply for food : 11 - 2.3 pf - 2 ps = pf 11 = 3.3 pf + 2ps ( equation 1 )…

Suppose there are only two goods - Food (F) and Shelter (S). The demand equations for these two goods depend on their prices, pf and ps as follows: DE(Pf,Ps) = 11 - 2.3pf - 2.0ps Ds(PF.Ps) = 13 - 1.1pF - 2.5ps The supply curves depend only on their own prices: S(pf) = PF S(ps) = 6.2ps Determine the equilibrium price of shelter.

Suppose there are only two goods - Food (F) and Shelter (S). The demand equations for these two goods depend on their prices, pf and ps as follows: DE(Pf,Ps) = 11 - 2.3pf - 2.0ps Ds(PF.Ps) = 13 - 1.1pF - 2.5ps The supply curves depend only on their own prices: S(pf) = PF S(ps) = 6.2ps Determine the equilibrium price of shelter.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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