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Assume the supply and demand functions for a manufacturing company are:

Supply: p= 2/3q-250 Demand: p= -4/3q + 750
where p is the price per unit in dollars and q is the quantity in units. Find the equilibrium quantity.
O 1,000
750
O250
O 100
O 500

User Yijing Shi
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1 Answer

7 votes
500.
The equilibrium quantity is the number that makes the values for supply and demand equal. To solve for this set the expressions equal to each other and solve for q. 2/3q-250=-4/3q+750. Take -250 to the other side by adding 250 to both sides. Then take -4/3 to the other side by adding 4/3. 6/3q=1000. 2q=1000. Divide 1000 by 2. 500. Q=500. This means that at 500 units the supply and demand functions are equal.
User Sylvestre
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