Question

The quantity demanded x each month of Russo Espresso Makers is 250 when the unit price p is $180; the quantity demanded each month is 1000 when the unit price is $150. The suppliers will market 750 espresso makers if the unit price is $80. At a unit price of $90, they are willing to market 1500 units. Both the demand and supply equations are known to be linear.
(a) Find the demand equation.
p = ____

(b) Find the supply equation.
p = ____

(c) Find the equilibrium quantity and the equilibrium price.
equilibrium quantity _____ units
equilibrium price $ _______

Answer 1

the demand rises by 750 when the price drops by 30, so

d = 250 + 25(180-x)

the supply rises by 750 when the price rises by 10, so

s = 750 + 75(x-80)

Now just set d=s and solve for x, the equilibrium price.

Plug that back into either equation to figure the quantity