Question

A graph has quantity on the x-axis and price (dollars) on the y-axis. A supply line goes through (20, 30) and (30, 40). A demand line goes through (0, 10) and (30, 40).
The figure above shows a store’s supply-demand graph for coffee makers. If the store sells $375 worth of coffee makers, which of the following is a valid possible price for them?
a.
$15
b.
$25
c.
$40
d.
$55

Answer 1

Supply and demand both lie on the line p = q + 10 (since slope = (40−30)/(30−20)=1 and the demand line through (0,10) gives p = q + 10).
Revenue = p·q = 375, so q(q+10)=375 ⇒ q^2+10q−375=0.
Solve: q = (−10 ± 40)/2 = 15 or −25. Discard −25, so q = 15 and p = 15+10 = $25.

Answer: b. $25.