Explore BrainMass

Explore BrainMass

    Econ omics : Minimum/Maximum Price

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Pleas help with: a, b, and c. Thank You!

    The general demand and supply functions for good A are estimated to be, respectively:
    Qd = 52.50 - 2.0P + 0.015M + 7.0PR
    Qs = -500.0 + 8.0P

    Where: Qd is quantity demanded per month, Qs is quantity supplied per month, P is price of good A,M is average household income, and PR is the price of a related good R. Assume the following values of the variables: M = $42,500, and PR = $30.

    a. What is the maximum price at which 500 units of good A can be sold?

    b. What is minimum price producers will accept to supply 500 units of good A?

    c. If the market price is $150, what follows in the market for this product?

    © BrainMass Inc. brainmass.com December 15, 2022, 8:21 pm ad1c9bdddf
    https://brainmass.com/economics/supply-and-demand/maximum-minimum-prices-example-problem-294409

    Solution Preview

    a. What is the maximum price at which 500 units of good A can be sold?

    Qd = 52.50 - 2.0P + 0.015(42500) + 7.0(30) = 52.50 - 2.0P + 637.5 + 210 = 900 - ...

    Solution Summary

    A complete, neat and step-by-step solution is provided in the attached file.

    $2.49

    ADVERTISEMENT