qassume that the equation for demand for bread at


Q. Assume that the equation for demand for bread at a small bakery is Qd = 60 - 10Pb + 3Y, where Qd is the quantity of bread demanded in loaves, price of bread is Pb in dollars($) for every loaf, also average income in the town is Y in thousands of dollars ($). Assume also that the equation for supply of bread is Qs = 30 + 20Pb - 30 Pf, where Qs is the quantity supplied and Pf is the price of flour in dollars per pound. Assume finally that markets clear, so that Qd = Qs.

a. If Y is 10 and Pf is $1, solve mathematically for equilibrium Quantity and equilibrium Pb.

b. If the average income in the town increases to 15, solve for the new equilibrium Quantity and equilibrium Pb.

Request for Solution File

Ask an Expert for Answer!!
Business Economics: qassume that the equation for demand for bread at
Reference No:- TGS0449674

Expected delivery within 24 Hours