Question: 1. 3.3 Suppose that the inverse market demand function for silicone replacement tips for Sony earbud head phones is p = pN- 0.1Q, where p

1. 3.3 Suppose that the inverse market demand function for silicone replacement tips for Sony earbud head phones is p = pN- 0.1Q, where p is the price per pair of replacement tips, pN is the price of a new pair of headphones, and Q is the number of tips per week. Suppose that the inverse supply function of the replacement tips is p = 2 + 0.012Q.

a. Find the effect of a change in the price of a new pair of headphones on the equilibrium price of replacement tips at the equilibrium, dp/dpN.

b. If pN = $30, what are the equilibrium p and Q?

What is the consumer surplus? What is the pro ducer surplus? M

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