Question

The supply in thousands of items, for custom phone cases can be modeled by the equation p= 75+8x , while demand can be while the demand can be modeled by p=190-15x, where p is in dollars. Find the equilibrium price and quantity, the intersection of the supply and demand curves.

Answer 1

At equilibrium, the market demand of custom phone cases will be equal to the market supply of custom phone cases.

Market demand function -

p = 190 - 15x, where p is the price and x is the quantity of goods

Market supply function -

p = 75 + 8x

Thus, at equilibrium the market demand function will be equal to market supply function.

Hence,

190 - 15x = 75 + 8x

23x = 190-75

23x = 115

x = 5 units

Substituting the value of x in market supply function, we get -

p = 75 + 8 * 5

= 75 + 40 = $ 115

Hence, equilibrium quantity and price are 5 units and $ 115 respectively.

Thus, at ( 5 , 115 ) the market demand and supply curves of Custom phone cases will intersect each other.

Step-by-step explanation:

Refer to the answer.