a. Market demand, X = 100,000x = 100,000*(1 - 0.5Px + 0.05I -
0.1Py) = 100,000 - 50,000Px + 5,000I - 10,000Py
So, X = 100,000 - 50,000Px + 5,000I - 10,000Py
b. Market supply, Q = 100q = 100*(10Px - 0.5PL + K) = 1000Px -
50PL + 100K
So, Q = 1000Px - 50PL + 100K
c. At equilibrium, market demand = market supply
So, 100,000 - 50,000Px + 5,000I - 10,000Py = 1000Px - 50PL +
100K
So, 100,000 - 50,000Px + 5,000*(200) - 10,000*(2) = 1000Px -
50*(10) + 100*(2)
So, 100,000 - 50,000Px + 1,000,000 - 20,000 = 1000Px - 500 +
200
So, 50,000Px + 1,000Px = 100,000 + 1,000,000 - 20,000 + 500 -
200
So, 51,000Px = 1,080,300
So, Px = 1,080,300/51,000
So, Px = 21.18
d. X = 100,000 - 50,000*(21.18) + 5,000*(200) -
10,000*(2) = 100,000 - 1,059,000 + 1,000,000 - 20,000 =
21,000
Firm's supply = 21,000/100 = 210
(Note: Post 4 subparts at a time.)
Week 7 Worksheet 1) Imagine that you work for a firm that sells good x in...
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