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Assume that the demand curve for a product is given by Q = 200 - P + 4I where I is average income measured in
Assume that the demand curve for a product is given by Q = 200 - P + 4I where I is average income measured in thousands of dollars. The supply curve is Q = P - 100. a) If I = 10, find the market-clearing price and quantity for the product. b) If I = 20, find the market-clearing price and quantity for the product. c) Draw a graph to illustrate your answers (in one graph with P on the y-axis and Q on the x-axis, draw the supply and demand curves and show how situations a) and b) differ).
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