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Answer the question

Answer the question-example-1
User Ilyas
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Smallville will import 2000 units.

Using the equations given, calculate supply and demand for that price and then find the difference between the 2 to see if you will need to import to meet supply or export to get rid of extra supply.

Find demand at the given price:

p =5000-.5Q

3000 = 5000- .5Q (subtract 5000 from both sides)

-2000 = -.5Q (now divide by -.5 on both sides)

Q = 4000

So at the Price of $3000, quantity demanded (Q) will be 4000

Now, find quantity supplied at the same price:

P = 1.5Q

3000 = 1.5 Q (divide both sides by 1.5)

Q= 2000

Compare these two numbers. At a price of $3000, we know there will be a demand of 4000 units and a supply of only 2000 units. To meet demand, Smallville must import 2000 units.

User Khadijah
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