The quantity of a product that is demanded is 6,000 units when the price is $250

Question

The quantity of a product that is demanded is 6,000 units when the price is $250. When the price is $225, the demand is 11,000 units. The manufacturer will not market the product if the price is below $150. For each price increase of $50, the manufacturer will market an additional 4,500 units of the product. Find the demand and supply equations, assuming both are linear. a) ODemand function: y- x + 220 ; Supply function : y = 90x + 150 200 b) Demand function:y=- 200 x + 280 ; Supply function : y = 90 x Demand function: y=-x+220; Supply function: y=-x+150 200 90 x-220: Supply function: y= 90 220; Supply function: y - x d) ODemand function: y - e) Demand function: y=max +280; Supply function : y=-x+ 150 200 90 f) ONone of the above

Explanation / Answer

demand function:

points on function are (a,b)=(6000,250) ,(c,d)=(11000,225)

equation of line in 2 point form is y-b=[(d-b)/(c-a)]*(x-a)

y-250=((225-250)/(11000-6000))(x-6000)

=>y-250=(-25/5000)(x-6000)

=>y-250=(-1/200)(x-6000)

=>y-250=(-1/200)x +(6000/200)

=>y-250=-(1/200)x +30

=>y=-(1/200)x +30+250

=>y= -(1/200)x +280

supply function :

(a,b)=(0,150),(c,d)=(0+4500, 150+50) =(4500, 200)

y-150=[(200-150)/(4500-0)](x-0)

=>y-150=(50/4500)x

=>y-150=(1/90)x

=>y=(1/90)x +150

option b) demand function :y= -(1/200)x +280; supply function y=(1/90)x +150

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