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Given: (q is number of items) demand function: d ( q ) = 291.6 − 0.4 q 2 supply function: s ( q ) = 0.5 q 2 find the equilibrium quantity: items find the equilibrium price: $

User Tspore
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Final answer:

The equilibrium quantity and price for the given demand and supply functions are 600 items and $1.40, respectively, which is where the demand and supply curves intersect.

Step-by-step explanation:

The equilibrium quantity is 600 items and the equilibrium price is $1.40.

At the equilibrium, the amount of goods supply equals the amount of goods demand. This is found where the demand function and supply function intersect. In this scenario, the equilibrium point occurs at a price of $1.40 and a quantity of 600, as both functions equalize. If we were to encounter prices above the equilibrium, like $1.80, it would result in excess supply; conversely, prices below, such as $1.20, lead to excess demand. Solving for equilibrium can also be achieved graphically, by plotting demand and supply curves on a graph, and finding their point of intersection, which should agree with the algebraically determined quantities.

User Manish Punia
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