Given below are the demand and supply functions for three interdependent commodities. Qd1 = 110 – 4P1 + 3P2 – 4P3 ; Qs1 = 2P1 – 20 Qd2 = 46 + 2P1 – 4P2 + 4P3 ; Qs2 = –14 + 2P2 Qd3 = 20 – P1 + 4P2 – 2P3 ; Qs3 = 2P3 – 10 Determine the equilibrium prices and quantities for the three commodity Market model. Then compute the price and cross elasticities of demand for the third market and interpret their coefficients.

July 5, 2021/in Samples /by Frank Main

Given below are the demand and supply functions for three
interdependent commodities.

Qd1 = 110 – 4P1 + 3P2 – 4P3 ; Qs1 = 2P1 – 20

Qd2 = 46 + 2P1 – 4P2 + 4P3 ; Qs2 = –14 + 2P2

Qd3 = 20 – P1 + 4P2 – 2P3 ; Qs3 = 2P3 – 10

Determine the equilibrium prices and quantities for the three
commodity Market model. Then compute the

price and cross elasticities of demand for the third market and
interpret their coefficients.