Question

The market equilibrium point for a product is reached when 12000 units are produced and sold at $27 per unit. The manufacturer will not produce any units at the price of $6, and the customers will not buy any at the price of $69. Find the supply and demand equations, assuming they are linear.
The equations should express price p in terms of quantity q.

Supply equation: p=
Demand equation: p=

Answer 1

If the equilibrium is such that only 12000 units are sold for $27, then the total earnings from the given scenario is $324,000. The supply equation would then be,
        supply: 324000 = 6p   ; p = 324000/6 = 54000
        demand: 324000 = 69p ; p = 324000/69 = 4695.65 ≈ 4696