Use the following general linear demand relation to answer questions : $$Q _ { d } = 680 - 9 P + 0.006 M - 4 P _ { R }$$ where M is income and $P _ { R }$ is the price of a related good, R.
-If M = $15,000 and $P _ { R }$ = $20 and the supply function is $Q _ { s } = 30 + 3 P$ , equilibrium price and quantity are, respectively,

Question

Use the following general linear demand relation to answer questions  : $$Q _ { d } = 680 - 9 P + 0.006 M - 4 P _ { R }$$ where M is income and $P _ { R }$ is the price of a related good, R.
-If M = $15,000 and $P _ { R }$ = $20 and the supply function is $Q _ { s } = 30 + 3 P$ , equilibrium price and quantity are, respectively,

Quizplus · Accepted Answer

The correct answer is A because when M = $15,000 and $P _ { R }$ = $20, the demand function becomes $Q _ { d } = 680 - 9 P + 90 - 80 = 790 - 9 P$. Setting this equal to the supply function $Q _ { s } = 30 + 3 P$ and solving for P gives P = $55. Substituting this back into either the demand or supply function gives Q = 195.

Use the Following General Linear Demand Relation to Answer Questions Qd=680−9P+0.006M−4PRQ _ { d } = 680 - 9 P + 0.006 M - 4 P _ { R }Qd​=680−9P+0.006M−4PR​

Use the Following General Linear Demand Relation to Answer Questions $Q _ { d } = 680 - 9 P + 0.006 M - 4 P _ { R }$