Question 1 Suppose that the demand and supply functions for good x are given as follows: Q_f =1200-3P, I + P, and O =470+ 2P, +2T where P, denotes the price of good x, Py denotes the price of a related product v, [ denotes income and T denotes the technology index. c-) Suppose now that exogenous variables are given as follows: Income (1) = 500, Price of the related product ( P) = 30, Technology index (T) =100. Find the equilibrium price and output values. Calculate the price elasticity of demand at the equilibrium? Is total revenue maximized at the equilibrium price? If not, what is the optimal strategy to maximize revenue? Why? Draw the demand line and TR in two diagrams and show the relationship between TR and price elasticity of demand explicitly. d-) Find the income elasticity of demand at the equilibrium price and output found in part c. Is good x a normal good? Find the cross price elasticity of demand for x with respect to price of y? Are the products complements or substitutes? Are you consistent with part b