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In Some Markets,demand Can Be Approximated by

Question 145

Essay

In some markets,demand can be approximated by
Q = 50 - 5P + 10Y
where Q is quantity,P price per unit,and Y = buyers' income.Supply can be approximated by
Q = -5 + 10P.
a.If Y = 20, what is equilibrium price and output?
b.If Y rises to 25, what is the new equilibrium price and output?

Correct Answer:

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a.Equate the supply and demand equations...

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