Industry analysts have long recognized the highly complementary relationship between used automobile tires and gasoline

Marketing Jan 09, 2021

Industry analysts have long recognized the highly complementary relationship between used automobile tires and gasoline. A recent study done by an automobile industry trade group estimated the following supply and demand functions:

QDT = 84 - 3PT - 1PG

QST = -6 + 16PT

QDG = 94 - 2PT - 4PG

QSG = -8 + 34PG

where QDT and QST refer to quantities of tires demanded and supplied each month measured in sets of four, QDG and QSG refer to quantities of gasoline demanded and supplied each month measured in gallons, PG is the price of gasoline per gallon, and PT is the price per set of four tires.

Calculate the equilibrium price and quantity that will prevail in both the tire and gasoline markets.

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