Question

C(x) = 500,000 + 4.75x (a) 1000 (b) 5000 (c) 10,000 10. Let the supply and demand functions for sugar is given by the following equations. Supply: p = 1.4x - .6 Demand: p = -2x + 3.2 (a) Find the equilibrium demand. (b) Find the equilibrium price.

Answer 1

10.

Given : Supply: S(p) = 1.4x - .6 Demand: D(p) = -2x + 3.2

1. in order to find the equilibriam demand and price. we will set the above expressions equal to each other and solve for x .

S(p) = D(p)

1.4x - 0.6 = -2x +3.2

1.4x +2x = 3.2 +0.6 ....(collect like terms)

3.4 x =3.8

x = 3.8/3.4

x = 1.117 ≈ 1.12

Therefore the equilibrim price = $1.12

2. Now that we have the equilibrium price, we can plug the value of x = 1.12 back into the demand equation in order to find the equilibrim demand .

D(p) = -2x +3.2

= -2(1.12) +3.2

=-2.24 +3.2

= 0.96

• This tells us that at equilibrium, the demand of the quantity (sugar )will be 0.96 ≈ 1 ,