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QUESTION

# Question 15 Multi part A) The following represents demand for widgets (a fictional product): QD=1058250P0.0001M0.

Question 15 Multi part

A) The following represents demand for widgets (a fictional product):

QD=1058−250P−0.0001M−0.5PR

where P is the price of widgets, M is income, and PR is the price of a related (fictional) good, the wodget. Supply of widgets is determined by

QS=2+250P

Widgets are _________, and widgets and wodgets are _____________.

Select one:

a. a normal good; substitutes.

b. an inferior good; substitutes.

c. an inferior good; complements.

d. a normal good; complements.

B) Assume that M=\$50,000 and PR=\$2.00. The equilibrium price of widgets is ______Answer:

C) The equilibrium quantity of widgets is Answer _____units.

D) Now assume two events occur: income rises to \$60,000 and supply conditions change such that QS=6+300P. Solve algebraically for the new equilibrium price of widgets after these two changes.