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Consider the three-commodity market model given: Q d 1 = 15 - 2p 1 + 2p 2 + p 3 and Q s 1 =
Consider the three-commodity market model given:
Qd1 = 15 - 2p1 + 2p2 + p3 and Qs1 = 2p1 - 7
Qd2 = 6 + 2p1 - 2p2 - p3 and Qs2 = 2p2 - 4
Qd3 = 4 + p1 - p2 - 3p3 and Qs3 = 4p3 - 6
(a) What is the relationship among the three goods? Are the goods substitutes or complements? Give a reason for your answer
(b) Write the equilibrium conditions for the model
(c) Use the substitution and elimination methods to find the equilibrium prices and quantities for the three goods
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