If you know a point on a line and you know the equation of a line parallel to this line, explain how to write the line’s equatio
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Answer:
(a)
(b)
(c)
Step-by-step explanation:
(a) For the demand equation D(q) we have
<em>P1: 138 Q1: 250</em>
<em>P2: 108 Q2: 1000</em>
We can find <u><em>m</em></u>, which is the slope of the demand equation,
and then we find b, which is the point where the curve intersects the y axis.
We can do it by plugging one point and the slope into the line equation form:
<em>With b: 148 and m: -1/25 we can write our demand equation D(q)</em>
(b) to find the supply equation S(q) we have
<em>P1: 102 Q1: 2200</em>
<em>P2: 102 Q2: 700</em>
<em></em>
Similarly we find <em>m</em>, and <em>b</em>
<em>And we can write our Supply equation S(q):</em>
(c) Now we may find the equilibrium quantity q* and the equilibrium price p* by writing <em>D(q)=S(q)</em>, which means the demand <u><em>equals</em></u> the supply in equilibrium:
We plug 1500 as q into any equation, in this case S(q) and we get:
Which is the equilibrium price p*.