Determine the equilibrium price and sales

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Reference no: EM131204155

The inverse demand curve for product X is given by: PX = 25 - 0.005Q + 0.15PY, where PX represents price in dollars per unit, Q represents rate of sales in pounds per week, and PY represents selling price of another product Y in dollars per unit. The inverse supply curve of product X is given by: PX = 5 + 0.004Q.

a. Determine the equilibrium price and sales of X when PY = $10.

b. Explain whether X and Y are substitutes or complements and why.

Reference no: EM131204155

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