a. A group of retailers will buy 108 televisions from a wholesaler if the price

Question

a. A group of retailers will buy 108 televisions from a wholesaler if the price is $450 and 148 if the price is $400. Whole seller is willing to supply 72 if the price is $400 and 152 if the price is $490. Assuming the resulting supply and demand functions are linear, find the equilibrium for the marker. (q,p)=?
b. Suppose that in certain market The demand function for a product is given by 10p + q= 2300 and the supply function is given by 40p-q=580. If the government levies a tax of $3 item on the supplier, who passes the tax on the consumer as a price increase, equilibrium price and quantity after the tax is levied. (q,p)? a. A group of retailers will buy 108 televisions from a wholesaler if the price is $450 and 148 if the price is $400. Whole seller is willing to supply 72 if the price is $400 and 152 if the price is $490. Assuming the resulting supply and demand functions are linear, find the equilibrium for the marker. (q,p)=?
b. Suppose that in certain market The demand function for a product is given by 10p + q= 2300 and the supply function is given by 40p-q=580. If the government levies a tax of $3 item on the supplier, who passes the tax on the consumer as a price increase, equilibrium price and quantity after the tax is levied. (q,p)?
b. Suppose that in certain market The demand function for a product is given by 10p + q= 2300 and the supply function is given by 40p-q=580. If the government levies a tax of $3 item on the supplier, who passes the tax on the consumer as a price increase, equilibrium price and quantity after the tax is levied. (q,p)?

Explanation / Answer

a) Demand equation : ( 108 , $450) and ( 148 , $400)

slope = ( 400 - 450)/( 148 - 108) = -50/40 =-5/4

p = -5q/4 +c ; 400 = -5*148/4 +c

400 = -5*36 + c ; c = 400 + 180 = 580

p = -5q/4 +580 ---(1)

Supply : ( 72 , $400) and ( 152 , $ 490)

slope = ( 490 - 400)/(152 - 72) = 90/80 = 9/8

p = 9q/8 + c ; 400 = 9*72/8 +c

400 = 81 +c ; c = 319

p = 9q/8 +319 ----(2)

Use equation (1) and (2) :

9q/8 +319 = -5q/4 +580

Equilibrium point : (p, q) = ( 110 , $442.60)

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