Question

The demand and supply functions for a particular good are given by: p=17−1² and p=2², respectively. Here and denote the quantity demanded and supplied, respectively, in thousands of units, and p denotes the price per unit in euros. What is the equilibrium quantity and price?

a) Quantity: 5, Price: 12
b) Quantity: 6, Price: 10
c) Quantity: 2, Price: 8
d) Quantity: 8, Price: 5

Answer 1

The equilibrium quantity is 5 thousand units and the equilibrium price is 12 euros per unit. Hence, the correct answer is option (A).

Step-by-step explanation:

To find the equilibrium quantity and price, we need to set the demand function (p = 17 - Qd^2) equal to the supply function (p = Qs^2). We can then solve for Qd and Qs and plug the values back into either equation to find the price.

After solving the equations, we find that the equilibrium quantity is 5 thousand units and the equilibrium price is 12 euros per unit. Therefore, the correct answer is Option A) Quantity: 5, Price: 12.