There Are Two Closely Related Crops,X and Y,with the Following

question 49

Multiple Choice

There are two closely related crops,X and Y,with the following demand functions Q_X = 180 - 2P_X + P_Y and Q_Y = 150 + P_X - P_Y where Q_X is the quantity of X,P_X is the price of X,Q_Y is the quantity of Y,and P_Y is the price of Y.These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves.The short-run perfectly inelastic supply for X is 200 while the short-run perfectly inelastic supply for Y is 100.In equilibrium,the prices are

• A) P_X = 30, P_Y = 80.
• B) P_X = 40, P_Y = 60.
• C) P_X = 60, P_Y = 120.
• D) P_X = 80, P_Y = 130.

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Definitions:

Equilibrium Quantity

The quantity bought and sold at the equilibrium price.

Expensive

Describes goods or services that have a high price or cost, often relative to similar items.

Mad Cow Disease

A neurological disorder in cattle that can be transmitted to humans, leading to a fatal brain disease known as variant Creutzfeldt-Jakob disease.

Upward Pressure

A situation in which there is an increase in prices or demand in the economy or a specific market.