Suppliers of a certain brand of digital voice recorders will make 10,000 available in the market if the unit price is $45. At a unit price of $50, 20,000 units will be made available. Assuming that the relationship between the unit price and the quantity supplied is linear, derive the supply equation. Then determine the quantity suppliers will make available when the unit price is $70. (For this problem, I set the equation with the two points (1000,45) & (20000,50)?
2 answers
And then 50-45/20,000-10,000 which equals to 1/2000 (simplified) as the slope? Or is that only for demand functions?
you are correct with your two points, ignoring the typo.
The slope of the line is (20000-10000)/(50-45) = 2000
So the equation is
y-10000 = 200(x-45)
Now just plug in x=70 to find the desired quantity.
The slope of the line is (20000-10000)/(50-45) = 2000
So the equation is
y-10000 = 200(x-45)
Now just plug in x=70 to find the desired quantity.
1 answer