Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc,where Qdm stands for millions of gallons of milk demanded,Pm stands for the price of milk and Pc stands for the price of cereal.The supply of milk is Qsm = 6Pm - 8,where Qsm stands for millions of gallons of milk supplied.The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10,respectively,where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied.What is the general equilibrium price for cereal?
A) $9.76
B) $6.10
C) $0.00
D) $11.25
Correct Answer:
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