part c Q.1. Suppose that the demand for steel in Japan is given by the equation Q's = 1200- 4Ps + PA + PT, where QS is the quantity of steel purchased (millions of tons peryear), PS is the price of steel (yen per ton), PA is the price of aluminum (yen per ton),and PT is the price of titanium (yen per ton). The supply curve for steel is given by Q$s= 4Ps. Similarly, the demand and supply curves for aluminum and for titanium aregiven by QʻA = 1200 – 4PA + Ps + Pr (demand curve for aluminum), Q°A = 4PA (supplycurve for aluminum), Qªr= 1200 – 4Pt + Ps + PA (demand curve for titanium), and Q°T= 4PT (supply curve for aluminum).a) Find the equilibrium prices of steel, aluminum, and titanium in Japan.b) Suppose that a strike in the Japanese steel industry shifts the supply curve for steelto Q°s = Ps. What does this do to the prices of steel, aluminum, and titanium?c) Suppose that growth in the Japanese beer industry, a big buyer of aluminum cans,fuels an increase in the demand for aluminum so that the demand curve for aluminumbecomes Q°A= 1500 – 4PA + Ps + PT. How does this affect the prices of steel,aluminum, and titanium?

(a)QDs=1200-4Ps+Pa+Pt QSs=4Ps For equilibrium price, equating demand and supply: 1200-4Ps+Pa+Pt=4Ps…

Q.1. Suppose that the demand for steel in Japan is given by the equation Q's = 1200 - 4Ps + PA+ PT, where QS is the quantity of steel purchased (millions of tons per year), PS is the price of steel (yen per ton), PA is the price of aluminum (yen per ton), and PT is the price of titanium (yen per ton). The supply curve for steel is given by Q°s = 4Ps. Similarly, the demand and supply curves for aluminum and for titanium are given by QA = 1200 – 4Pa + Ps + Pr (demand curve for aluminum), Q°A = 4PA (supply curve for aluminum), Qªr = 1200 – 4Pr + Ps + PA (demand curve for titanium), and Q°r = 4PT (supply curve for aluminum). a) Find the equilibrium prices of steel, aluminum, and titanium in Japan. b) Suppose that a strike in the Japanese steel industry shifts the supply curve for steel to Q$s = Ps. What does this do to the prices of steel, aluminum, and titanium? c) Suppose that growth in the Japanese beer industry, a big buyer of aluminum cans, fuels an increase in the demand for aluminum so that the demand curve for aluminum becomes QA = 1500 – 4PA + Ps + Pr. How does this affect the prices of steel, aluminum, and titanium?

Q.1. Suppose that the demand for steel in Japan is given by the equation Q's = 1200 - 4Ps + PA+ PT, where QS is the quantity of steel purchased (millions of tons per year), PS is the price of steel (yen per ton), PA is the price of aluminum (yen per ton), and PT is the price of titanium (yen per ton). The supply curve for steel is given by Q°s = 4Ps. Similarly, the demand and supply curves for aluminum and for titanium are given by QA = 1200 – 4Pa + Ps + Pr (demand curve for aluminum), Q°A = 4PA (supply curve for aluminum), Qªr = 1200 – 4Pr + Ps + PA (demand curve for titanium), and Q°r = 4PT (supply curve for aluminum). a) Find the equilibrium prices of steel, aluminum, and titanium in Japan. b) Suppose that a strike in the Japanese steel industry shifts the supply curve for steel to Q$s = Ps. What does this do to the prices of steel, aluminum, and titanium? c) Suppose that growth in the Japanese beer industry, a big buyer of aluminum cans, fuels an increase in the demand for aluminum so that the demand curve for aluminum becomes QA = 1500 – 4PA + Ps + Pr. How does this affect the prices of steel, aluminum, and titanium?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 24QP

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