The demand and supply functions for two interdependent goods are given by Q D 1 400 5P 1 3P 2 Q D 2 300 2P 1 3P 2 Q S 1 60 3P 1 Q S 2 100 2P 2 (a) Show that the equilibrium prices satisfy (b) Use Cramers rule to find the equilibrium price of good 1 460 3 2 5 400 P,...

The demand and supply functions for two interdependent goods are given by Q D 1 = 400

Question:

The demand and supply functions for two interdependent goods are given by
Q_D₁ = 400 − 5P₁ − 3P₂
Q_D₂ = 300 − 2P₁ − 3P₂
Q_S₁ = −60 + 3P₁
Q_S₂ = −100 + 2P₂
(a) Show that the equilibrium prices satisfy
460 3 2 5 400 P, (b) Use Cramer’s rule to find the equilibrium price of good 1.