Question

The Cool Company determines that the supply function for its basic air conditioning unit is S(p) = 40 + 0.008p3 and that its demand function is D(p) = 200 - 0.16p2, where p is the price. Determine the price for which the supply equals the demand.

Answer 1

We are given the functions:

S (p) = 40 + 0.008 p^3 ---> 1

D (p) = 200 – 0.16 p^2 ---> 2

T o find for the price in which the price of supply equals demand, all we have to do is to equate the two equations, equation 1 and 2, and calculate for the value of p, therefore:

S (p) = D (p)

40 + 0.008 p^3 = 200 – 0.16 p^2

0.008 p^3 + 0.16 p^2 = 160

p^3 + 20 p^2 = 20,000

p^3 + 20 p^2 – 20,000 = 0

Calculating for the roots using the calculator gives us:

p = 21.86, -20.93±21.84i

Since price cannot be imaginary therefore:

p = 21.86