The equilibrium price of replacement tips at the equilibrium

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Reference no: EM13975089

Suppose that the inverse market demand for silicone replacement tips for Sony EX71 earbud headphones 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 producer surplus?

Reference no: EM13975089

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