The market equilibrium point for a product is reached when 7000 units are produced and sold at $25 per unit. The manufacturer will not produ

Question

The market equilibrium point for a product is reached when 7000 units are produced and sold at $25 per unit. The manufacturer will not produce any units at the price of $3, and the customers will not buy any at the price of $70. Find the supply and demand equations, assuming they are linear. The equations should express price p in terms of quantity q.

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Liliana 3 weeks 2022-01-07T08:30:13+00:00 1 Answer 0 views 0

Answers ( )

  1. Charlotte
    0
    2022-01-07T08:31:48+00:00

    Answer:

    Supply equation is p=(22/7000)*q+3

    The demand equation is p=-(45/7000)*q+70

    Step-by-step explanation:

    Let supply equation be P=aq+b

    Let demand equation be P=cq+d

    P=price per unit while q=quantity manufactured and sold

    According to the information given the producer will produce zero unit at the price of $3

    In other words,when p=$1,q=0

    3=a(0)+b

    b=3

    At equilibrium q=7000 units and p=$25

    Therefore,25=7000a+3

    25-3=7000a

    22=7000a

    a=22/7000

    Supply equation is p=(22/7000)*q+3

    According to data given consumers will demand zero unit at the price of $70

    p=$70 when q =0

    Supply equation is given as

    p=2

    P=cq+d

    70=c(0)+d

    d=70

    at equilibrium q=7000,p=25

    25=7000c+70

    25-70=7000c

    -45=7000c

    c=-45/7000

    Demand equation is given as :

    p=-(45/7000)*q+70

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