Consider a two-commodity market. When the unitprices of the products are P1 and P2, the quantities demanded,
a. What is the relationship between the two commodities? Do they compete, as do Volvos and BMWs, ordo they complement one another, as do shirts andties?
b. Find the equilibrium prices (i.e., the prices for whichsupply equals demand), for both products.
Want to see the full answer?
Check out a sample textbook solutionChapter 1 Solutions
Linear Algebra with Applications (2-Download)
- 23. Consider a simple economy with just two industries: farming and manufacturing. Farming consumes 1/2 of the food and 1/3 of the manufactured goods. Manufacturing consumes 1/2 of the food and 2/3 of the manufactured goods. Assuming the economy is closed and in equilibrium, find the relative outputs of the farming and manufacturing industries.arrow_forwardSuppose the coal and steel industries form a closed economy. Every $1 produced by the coal industry requires $0.30 of coal and $0.70 of steel. Every $1 produced by steel requires $0.80 of coal and $0.20 of steel. Find the annual production (output) of coal and steel if the total annual production is $20 million.arrow_forwardfor C and D the first drop down options (does or does not) and the secound drop down options (Too small or too large)arrow_forward
- Assume that the company produces 100 pound sacks of 35-25-15 fertilizer for lawns and 100 pound sacks of 13-15-15 fertilizer for gardens, where the numbers are the percentage by weight of nitrate, phosphate, and potash, respectively, in each sack. Assume also that the company has on hand 13 tons of nitrate, 11 tons of phosphate, and 10 tons of potash. Assume also that the profit on each sack of lawn fertilizer is $15.00 and the profit on each sack of garden fertilizer is $7.00. How many sacks of each type of fertilizer should the company make in order maximize its profit?arrow_forwardSuppose you are the buyer for the housewares department of a department store. A number of vendors in your area carry similar lines of merchandise. On sets of microwavable serving bowls, Brand A offers a list price of $400 per dozen less a 35% trade discount. Brand B offers a similar set for a list price of $425 less a 43% trade discount. (a)Which vendor is offering the lower net price? Brand A Brand B (b)If you order 500 dozen sets of the bowls, how much money (in $) will be saved by using the lower-priced vendor? $arrow_forwardA specific model of computer servers are being sold by Company A for $26,900 each, offering trade discounts of 8% and 5% and by Company B for $35,900 each, offering trade discount rates of 13% and 2%. a. Which company offers the servers for a cheaper price? A� B� b. What further trade discount rate must the company with the higher price provide to match the lower price? %arrow_forward
- According to a model developed by economists E. Heady and J. Pesek, if fertilizer made from N pounds of nitrogen and P pounds of phosphate is used on an acre of farmland, then the yield of corn (in bushels per acre) is Y = 7.5 + 0.6N + 0.7P − 0.001N2 − 0.002P2 + 0.001NP A farmer intends to spend $30/acre on fertilizer. If nitrogen costs 25 cents/lb and phosphate costs 20 cents/lb, which combination of N and P produces the highest yield of corn?arrow_forwardIn a certain company, the salary of men can take the values of 1,000,000, 1,500,000, 2,000,000 and 2,500,000. Women can enjoy the following salaries: 500,000, 1,000,000, 1,500,000 and 2,000,000. Assuming that the percentage of men earning each of the values is the same, and the same relative to women, and that men's wages are independent of women's wages, what is the probability that a couple, chosen at random, together, earn between 2,000,000 and 3,500,000 (included)?arrow_forwardWe can immediately conclude that in this equilibrium type-1 player 1 must play...? State your answer as a value for σ1(1).arrow_forward
- A small company manufactures a touring bike (T), a mountain bike (M), and a racing bike (R). The touring bike retails at $1000, the mountain bike retails at $700, and the racing bike retails at $1,500. The company has two warehouses, one in Adelaide and one in Mount Gambier. The Adelaide warehouse has a stock of 10 T, 15 M, and 20 R. The Mount Gambier warehouse has a stock of 5 T, 15 M, and 10 R. (a) Summarise the stock in a matrix W of order 2 × 3 preserving the order T, M, R for the columns, and with Adelaide corresponding to the first row. (b) Let S represent the total number of bikes of each type that the company has in stock. Then S = AW for some matrix A. Write down what the matrix A must be. (c) Use matrix multiplication to calculate S. (d) Write down a vector B such that a matrix product with W will give the retail value of stock V in each warehouse. (e) Use your answer to (d) and matrix multiplication to calculate the retail value of stock V in each…arrow_forwarda) Suppose demand is D and supply is S0. If a price ceiling of $6 is imposed, shortage = and full economic price = b) Suppose demand is D and supply is S0. If a price floor of $12 is imposed, surplus =. and cost to government of purchasing any and all unsold units = c) When demand and supply are given by D and S0 respectively, CS = and PS = d) Suppose demand is D and supply is S0. A price ceiling of $6 would produce a (ES or ED) _____ of _____ units e) At $6 price ceiling, CS = and PS = f) g. A price ceiling of $6 would be beneficial to consumers? (compare CS before and after the price ceiling): T or F:arrow_forwardAn electric company manufactures two different types of air conditions say, A and B. Both air conditions go through the first finisher and then the packer. Air condition A requires 2 hours of the finishing time and 1 hour of packing time. Air condition B requires 14 hours of finishing and 2 hours of packing time. The finisher has 10 hours, and packer has 8 hours of available time each month. Profit on one A air condition is 25 RO and on one B air condition is 15 RO Assuming that the company can sell all that produced. How many of each type of air condition should be manufacture to obtain the best return. (Use any method to find the best return)arrow_forward
- Linear Algebra: A Modern IntroductionAlgebraISBN:9781285463247Author:David PoolePublisher:Cengage Learning