Q1. The equilibrium conditions for two substitute goods are given below:
5P, -- 2P, = 15 and-P. + 8P, = 16
Find the equilibrium prices of the two goods.
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Step-by-step explanation:
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Step-by-step explanation:
Given that:
The equilibrium conditions for two substitute goods are given below:
5P1- 2P2 = 15 and -P1 + 8P2 = 16
To find :
Find the equilibrium prices of the two goods.
Solution:
To find the equilibrium prices of the two goods,
solve the two equations
equate the coefficient of P1 by multiplying eq2 by 5
Put the value of P2 in eq1
Thus,
Equilibrium prices of two goods are
P1=4
P2=5/2
Hope it helps you.
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