At a price of $4.97 per pound, the supply for cherries is 16,289 pounds, and the demand is 10,218 pounds. When the price drops to $4.31 per pound, the supply decreases to 10,676 pounds and the demand increases to 12,992 pounds. Assume that the price-supply and price-demand equations are linear. What is the equilibrium quantity? Round to the nearest pound. pounds.
In a free market economy, the price of a product is determined by the relationship between supply and demand. Suppliers are more willing to supply a product at higher prices. So when the price is high, supply is high. On the other hand, consumers of a product are generally less willing to buy a product at higher prices. So when the price is high, demand is low.
In a free competitive market, the price of a product tends to move toward an equilibrium price, in which the supply and demand are equal; that common value of the supply and demand is the equilibrium quantity. To find the equilibrium price, we solve the system consisting of the price-supply and price-demand equations.
1.
At a price of $4.97 per pound, the supply for cherries is 16,289 pounds, and the demand is 10,218 pounds. When the price drops to $4.31 per pound, the supply decreases to 10,676 pounds and the demand increases to 12,992 pounds. Assume that the price-supply and price-demand equations are linear.
What is the equilibrium quantity? Round to the nearest pound.
pounds.
Step by step
Solved in 3 steps with 3 images
