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:

Variables

Elements, features, or factors that are liable to vary or change within a study or experiment.

Age

The length of time that a person or thing has existed; a particular stage in someone's life.

Amount of Hair

A characteristic referring to the density, thickness, and overall quantity of hair on an individual's body or head.

Negatively Correlated

A relationship between two variables in which one variable increases as the other decreases.