Solve the problem.
-A textbook economy has only two industries, the electric company and the gas company. Each dollar's worth of the electric company's output requires 0.20 of its own output and 0.4 of the gas company's output. Each dollar's
Worth of the gas company's output requires 0.50 of its own output and 0.7 of the electric company's output.
What should the production of electricity and gas be (in dollars) if there is a $16 M demand for electricity and a $7
M demand for gas?
A) Electricity: $107.5 M; Gas: $100 M
B) Electricity: $125 M; Gas: $92.5 M
C) Electricity: $115 M; Gas: $103.5 M
D) Electricity: $97.5 M; Gas: $103 M

Question

Quizplus · Accepted Answer

To solve this, we set up equations based on the given information. Let E be the production of electricity and G be the production of gas. The equations are:$$E = 0.20E + 0.4G + 16$$$$G = 0.50G + 0.7E + 7$$Solving these equations simultaneously gives us E = $107.5 M and G = $100 M.

Solve the Problem. -A Textbook Economy Has Only Two Industries, the Electric Company