In Some Markets, Demand Can Be Approximated by

question 248

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?

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Definitions:

Opportunity

A set of circumstances that makes it possible to do something, especially in terms of making business decisions or investments that could lead to profit.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from revenue.

Earnings

The amount of profit that a company generates during a specific period, often reported as net income.

Profit

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain the activity.