Question

A graph has quantity on the x-axis and price on the y-axis. Demand curve points are at (20, 70), (40, 40), (60, 10).A graph has quantity on the x-axis and price on the y-axis. A demand line goes through (20, 70), (40, 80), (60, 90).
Based on the demand graph and the supply graph shown above, what is the price at the point of equilibrium?
a.
100
b.
70
c.
40
d.
There is not enough information given to determine the point of equilibrium.

Answer 1

Supply line (through (20,70),(40,80)) is p = 0.5q + 60.
Demand line (through (20,70),(40,40)) is p = −1.5q + 100.
Set equal: 0.5q + 60 = −1.5q + 100 → 2q = 40 → q = 20, so p = 70.

Answer: b. 70