Equate supply and demand in the wine market

Question

Problem

The following statements describe supply and demand conditions in the markets for cheese and wine, respectively.

• The demand for cheese is given by Q_cd= 30 - P_c- P_w, where Qc d is the quantity of cheese demanded each week in ounces, P_cis the price of a pound of cheese, and Pw is the price of a bottle of wine.
• The demand for wine is given by Q_wd= 30 - P_c- P_w.
• The supply of cheese is given by Q_cs= P_c.
• The supply of wine is given by Q_ws= P_w.

a. Are wine and cheese linked on the supply side of the market, or on the demand side?

b. Equate supply and demand in the cheese market, and simplify to express the price of cheese as a function of the price of wine.

c. Equate supply and demand in the wine market, and simplify to express the price of wine as a function of the price of cheese.

d. Substitute the expression for the price of wine you found in (c) into the equation you found in (b) to solve for the price of cheese.

e. Plug the price you calculated in (d) into the expression you derived in (c) to solve for the price of wine.

f. Plug the prices of wine and cheese you found in (d) and (e) back into either the supply or demand functions for wine and cheese to find the equilibrium quantities of wine and cheese that will be sold.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.