16.3. Studies indicate that the supply and demand schedules for ties (t) and jackets ( j) in a market are as follows:

Demand for ties:

Supply of ties:

Demand for jackets:

Supply of jackets:

The estimates of the schedules are valid only for prices at which quantities are positive.

a) Find the equilibrium prices and quantities for ties and jackets.

b) Do the demand schedules indicate that jackets and ties are substitute goods, complementary goods, or independent goods in consumption? How do you know?

Qs j " $120 # 2Pj Qd j " 295 $ Pt $ 3Pj Qs t " $60 # 3Pt Qd t " 410 $ 5Pt $ 2Pj Qs G " PG.

Qd G " 3 $ PG Qs A " 0.3PA.

Q d A " 20 $ 0.7PA $ PG, Q s M " PM.

Q s Q B " 3PB. s M " 2PM Q d 2PM # PB B " 60 $ 6PB # 4PM Q d M " 20 $