Question

Suppose that the demand and price for lemons are related by p=D(q)=16−1.25q. Where p is the price (in dollars) and q is the quantity demanded (in hundreds of quarts). Find the price if the level of demand is 900 quarts. Select the correct answer below:

a) 9 4.75
b) 11.25
c) 16.25
d) 1.25

Answer 1

Using the demand function p = D(q) = 16 - 1.25q, and substituting q = 9 for the 900 quarts (in hundreds of quarts), we find the price of lemons to be $4.75 when the demand is at 900 quarts.

Step-by-step explanation:

To find the price when the level of demand for lemons is 900 quarts, we use the demand function p = D(q) = 16 - 1.25q, where p represents the price in dollars and q is the quantity demanded in hundreds of quarts. Since the demand is 900 quarts, we divide this by 100 to convert it into the unit 'hundreds of quarts' (q = 9). Substituting q into the equation, we get:

p = D(9) = 16 - 1.25(9)

p = 16 - 11.25

p = 4.75

Therefore, the price of lemons when the demand is 900 quarts is $4.75.