Let the demand and supply functions be represented by p=D(q) and p=S(q), respectively, where p is the price per item in dollars and q is the quantity of items. D(q) = 42-.03q S(q) = .02q -20

Question

Find the equilibrium price. Hint: you will first find the equilibrium quantity (q) and once you know this you can find the equilibrium price (p)

Answer 1

At equilibrium supply equals demand

42-.03q=.02q-20
.01q=20
q=2000