Question
Demand for flower bouquets in a suburban town is described by: QD = 50 - 5P + 2Y, where Q is quantity, P is price
Demand for flower bouquets in a suburban town is described by: QD = 50 - 5P + 2Y, where Q is quantity, P is price per unit, and Y is an index of consumer income. Similarly, supply is described by: QS = -5 + 10P.
a. If Y = 100, what is equilibrium price and output?
b. If Y rises to 122.5, what is the new equilibrium price and output?
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Microeconomics
Authors: Douglas Bernheim, Michael Whinston
2nd edition
73375853, 978-0073375854
