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    Examine market equilibrium price

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    The widget industry in Springfield is competitive, with numerous buyers and sellers.
    Consumers don't differentiate among the various brands of widgets (no product differentiation).

    The industry demand curve is given by:
    Qd = 998 - 5Pw + 4 Y - 6Pg

    The industry supply curve is given by:
    Qs = +15Pw - 3 Wage

    Where Pw represents the price of widgets, Pg is the price of gasoline, Y is disposable personal
    income in Springfield, and Wage is wages paid to workers in widget factories.
    Currently, Y= $10, Pg = $3, and Wage = $20.
    What is the market equilibrium price?






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    Solution Summary

    This solution explains how to find the market equilibrium price for the given problem.