Problema Solution
Suppose the price p of bolts is related to the quantity q that is demanded by:
p = 540 - 4q2
where q is measured in hundreds of bolts. Suppose the supply function for bolts is given by
p = 4q2,
where q is the number of bolts (in hundreds) that are supplied at price p. Find the equilibrium price
Answer provided by our tutors
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded in a market.
we find the demanded quantity using the equation:
p = 540 - 4q^2
q^2 = (540 - p)/4
we find the supplied quantity using the equation:
p = 4q^2
q^2 = p/4
the quantity of goods supplied is equal to the quantity of goods demanded:
(540 - p)/4 = p/4
by solving we find:
p = 270
click here to see the step by step solution of the equation:
the equilibrium price is 270.