I derived (aggregate) supply and (aggregate) demand functions from primitive maximization problems! Finally, use these functions to calculate the equilibrium prices, p₁ 0 and p₂ 0, and the quantities that are produced (and consumed) in equilibrium, x₁ 0 and x₂ 0.

That is, in Exercise 2, (3) I derived 2 aggregate demand functions (one for each good). In Exercise 4, (3) I derived 2 aggregate supply functions (one for each good). Use the equilibrium condition, i.e., aggregate demand equals aggregate supply, to set up a system of 4 equations with 4 unknowns (p 1 , p 2 , x 1 , x 2 ). Solve this system to find the equilibrium prices and quantities. (Note that the supply functions are linear, whereas the demand functions are non-linear. Thus, the system is non-linear. So, you cannot apply matrix algebra to find the solution.)

Exercise2,(3) aggregate demand : x₁ =3,00,000 units for good 1 and x₂ =3,00,000 units for good 2

Exercise4,(3) aggregate supply : x₁ = 6,00,000p for good 1 and x₂ = 12,00,000p₂ for good 2