General Equilibrium Theory 1. Suppose that the demand for steel in India is given by the equation Q's = 1200 -4Ps + PA + Pr, where OS is the quantity of steel purchased (millions of tons per year), PS is the price of steel (yen per ton), PA is the price of aluminum (yen per ton), and PT is the price of titanium (yen per ton). The supply curve for steel is given by Q's = 4Ps. Similarly, the demand and supply curves for aluminum and for titanium are given by Q A = 1200- 4PA + Ps + PT (demand curve for aluminum), Q A = 4PA (supply curve for aluminum), QT = 1200 - 4PT + Ps + PA (demand curve for titanium), and Q T = 4PT (supply curve for aluminum). (20 marks) A. Find the equilibrium prices of steel, aluminum, and titanium in India. 6 marks B. Suppose that a strike in the Indian steel industry shifts the supply curve for steel to Q's = Ps. What does this do to the prices of steel, aluminum, and titanium? 6 marks C. Suppose that growth in the Indian beer industry, a big buyer of aluminum cans, fuels an increase in the demand for aluminum so that the demand curve for aluminum becomes Q A = 1500 - 4PA + Ps + PT. How does this affect the prices of steel, aluminum, and titanium? 8 marks