14. -/0.5 points WaneAC5 1.3.085. My Notes You can sell 130 pet chias per week i

Question

14. -/0.5 points WaneAC5 1.3.085. My Notes You can sell 130 pet chias per week if they are marked at $1 each, but only 80 each week if they are marked at $2/chia. Your chia supplier is prepared to sell you 10 chias each week if they are marked at $1/chia, and 60 each week if they are marked at $2 per chia. (a) Write down the associated linear demand and supply functions. demand function q(p) supply function q(p)= (b) At what price should the chias be marked so that there is neither a surplus nor a shortage of chias? HINT [See Example 4.] $1 Praetice It Talk to a Tutor

Explanation / Answer

1) finding demand equation

( 1, 130 ) and ( 2 , 80 )

slope = ( 80 - 130 ) / (2-1 )

slope = -50

hence, demand equation is

q(p) = -50 p + 180

now finding supply equation

( 1 , 10 ) and ( 2 , 60 )

slope = ( 60 - 10 ) / (2-1)

slope = 50

supply equation is

q(p)= 50p - 40

b)  

setting both demand and supply equation equal to each other

50p - 40 = -50p + 180

100p = 220

p = 2.2

so, at $ 2.2 chias be marked

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