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?
105© BrainMass Inc. brainmass.com October 10, 2019, 2:51 am ad1c9bdddf
This solution explains how to find the market equilibrium price for the given problem.