Shocks to the Equilibrium 1. Complete the sentences: The equilibrium changes only if These demand and supply curves shift if 2. The estimated monthly U.S. demand function for avocados is Q = 144 - 40p + 20pt, where pt is the price of tomatoes, a substitute for avocados. The estimated supply function is Q = 50 + 15p. The initial price of tomatoes is $0.80. Using algebra, determine the initial equilibrium price and quantity of avocados, and then determine how price and quantity change if the price of tomatoes increases by $0.55 to $1.35.

Shocks to the Equilibrium 1. Complete the sentences: The equilibrium changes only if These demand and supply curves shift if 2. The estimated monthly U.S. demand function for avocados is Q = 144 - 40p + 20pt, where pt is the price of tomatoes, a substitute for avocados. The estimated supply function is Q = 50 + 15p. The initial price of tomatoes is $0.80. Using algebra, determine the initial equilibrium price and quantity of avocados, and then determine how price and quantity change if the price of tomatoes increases by $0.55 to $1.35.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.12P

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