The following represents demand for widgets (a fictional product): QD=360-6P+0.003M-2PRQD=360-6P+0.003M-2PR, where PP is the price of widgets, MM is income, and PRPR is the price of a related (fictional) good, the wodget. Supply of widgets is determined by QS=-20+4PQS=-20+4P.
Widgets are a _________, and widgets and wodgets are _____________.
Select one:
a. normal good; complements.
b. inferior good; substitutes.
c. inferior good; complements.
d. normal good; substitutes.
Assume that M=$42,000M=$42,000 and PR=$8.00PR=$8.00. The equilibrium price of widgets is
Answer:
The equilibrium quantity of widgets is Answer? units.
Now assume two events occur: income rises to $46,000 and supply conditions change such that QS=-34+6PQS=-34+6P. Solve algebraically for the new equilibrium price of widgets after these two changes.
Answer: