Asked by Osayama Jackie on May 10, 2024
Verified
The demand function for fresh strawberries is q 200 5p and the supply function is q 60 2p.What is the equilibrium price?
A) $10
B) $20
C) $40
D) $50
E) None of the above.
Demand Function
A mathematical expression representing the relationship between the quantity demanded of a good and its influencing factors like price, income, and preferences.
Supply Function
A mathematical representation of the relationship between the quantity of a good or service that producers are willing to sell and the price of that good or service.
Equilibrium Price
The price point in the market where the amount of goods being offered matches the amount of goods consumers want to buy.
- Calculate equilibrium prices and quantities in markets for various goods.
Verified Answer
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Final Answer :
B
Explanation :
To find the equilibrium price, set the demand function equal to the supply function and solve for ppp . The demand function is q=200−5pq = 200 - 5pq=200−5p and the supply function is q=60+2pq = 60 + 2pq=60+2p . Setting them equal to each other: 200−5p=60+2p200 - 5p = 60 + 2p200−5p=60+2p , solving for ppp gives p=20p = 20p=20 .
Learning Objectives
- Calculate equilibrium prices and quantities in markets for various goods.