Solved

Suppose Milk and Cereal Are Compliments and the Demand for Milk

Question 19

Multiple Choice

Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc,where Qdm stands for millions of gallons of milk demanded,Pm stands for the price of milk and Pc stands for the price of cereal.The supply of milk is Qsm = 6Pm - 8,where Qsm stands for millions of gallons of milk supplied.The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10,respectively,where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied.Which of the following gives the market-clearing curve for cereal?


A) Pc = 100 - (Pm/10)
B) Pc = 8 - (Pm/10)
C) Pc = 10 - (Pm/10)
D) Pc = 10 + (Pm/10)

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions