The quantity demanded x each month of Russo Espresso Makers is 250 when the unit
ID: 3017529 • Letter: T
Question
The quantity demanded x each month of Russo Espresso Makers is 250 when the unit price p is $138. The quantity demanded each month is 1000 when the unit price is $108. The suppliers will market 700 espresso makers when the unit price is $66. At a unit price of $96, they are willing to market 2200 units. Both the supply and demand equations are known to be linear.
(a) Find the demand equation.
p =
(b) Find the supply equation.
p =
(c) Find the equilibrium quantity and the equilibrium price.
Explanation / Answer
supply curve points are ( 66,700) (96,2200)
demand curve points are ( 138,250) ( 108,1000)
finding equation of each curve
slope of supply curve is (2200 - 700 ) / (96 - 66 )
m = 50
b) supply equation is S(p) = -2600 +50p
finding equation of demand curve
slope = (1000- 250 ) / (108-138)
m = -25
a) D(p) = 3700 - 25p
c) equillibrium occurs when demand = supple
setting both equatiosn equal to each other
3700 - 25p = -2600 +50p
3700 + 2600 = 50p + 25p
p = 84
equillibrium price is $ 84
equillibrium quantity is 3700 - 25(84)
= 1600 units
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