A Textbook Economy Has Only Two Industries, the Electric Company

Multiple Choice

A textbook economy has only two industries, the electric company and the gas company. Each dollar's worth of the electric company's output requires 0.20 of its own output and 0.4 of the gas company's output. Each dollar's worth of the gas company's output requires 0.50 of its own output and 0.7 of the electric company's output. What should the production of electricity and gas be (in dollars) if there is a $16 M demand for electricity and a $7 M demand for gas?

A) Electricity: $97.5 M; Gas: $103 M
B) Electricity: $125 M; Gas: $92.5 M
C) Electricity: $115 M; Gas: $103.5 M
D) Electricity: $107.5 M; Gas: $100 M