Question: Lumber and sawdust are joint products, whose demand functions are DL and DS as shown in the diagram. The quantity axis measures the number of

Lumber and sawdust are joint products, whose demand functions are DL and DS as shown in the diagram. The quantity axis measures the number of trees. Points on the demand schedules indicate demands for the lumber or sawdust equivalents of a given quantity of trees.


Lumber and sawdust are joint products, whose demand functions are


a. Provide an economic interpretation of the fact that the demand schedule for sawdust extends below the horizontal axis.
b. If the supply schedule for trees is as given in the diagram, show the equilibrium prices and quantities of sawdust and lumber on agraph.

Supply of trees Di 0

Step by Step Solution

3.30 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

a At small quantities people are willing to pay a positive price for sawdust but beyo... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

363-B-E-M-E (3756).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!