Assume there are two goods in an economy, gasoline and petrodiesel that aresubstitutes in consumption but complements in production. Gasoline demand andsupply are:Qdg = 750 – 45Pg+ 30Pp and Qºg = 30Pg+ 15PPwhere Pg is price of gasoline and Pp price of petrodiesel. Petrodiesel demand and supplyare:Qdp = 1,495 – 40PÞ+ 23Pg and Q®p = 25Pp + 10P|A. Is demand-side link dominant or supply-sidelink?Explain in 1 or 2 sentences.

(A). Demand link with the gasoline shifts inward that would hold over the no change in supply curve,…

Assume there are two goods in an economy, gasoline and petrodiesel that are substitutes in consumption but complements in production. Gasoline demand and supply are: Qdg = 750 – 45Pg + 30P, and Q°g = 30Pg + 15PP where Pg is price of gasoline and Pp price of petrodiesel. Petrodiesel demand and supply are: Qªp = 1,495 – 40P, + 23Pg and Q°p = 25Pp + 10P; %3D A. Is demand-side link dominant or supply-side link? Explain in 1 or 2 sentences.

Assume there are two goods in an economy, gasoline and petrodiesel that are substitutes in consumption but complements in production. Gasoline demand and supply are: Qdg = 750 – 45Pg + 30P, and Q°g = 30Pg + 15PP where Pg is price of gasoline and Pp price of petrodiesel. Petrodiesel demand and supply are: Qªp = 1,495 – 40P, + 23Pg and Q°p = 25Pp + 10P; %3D A. Is demand-side link dominant or supply-side link? Explain in 1 or 2 sentences.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.1P

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