N1

1. The prices per ton of wheat and rice are P 1 and P 2 respectively. The market demand for wheat is given by Q 1 =4-10P 1 +7P 2 and for rice by Q 2 =3+7P 1 -5P 2 . The supply of wheat is related to prices by the relation Q 1 =7+P 1 -P 2 . The supply of wheat is related to prices by the relation Q 1 =7+P 1 -P 2 and supply of rice by Q 2 =- 27-P 1 +2P 2 . (a) Write down the relevant simultaneous equations for determining the equilibrium prices in matrix form. (b) Find the equilibrium prices and quantities using Cramer's rule.