Question

If the demand function for a commodity is given by the equation

Answer 1

Answer:

Equilibrium quantity = 26.92

Equilibrium price is $31.13

Step-by-step explanation:

Given :Demand function : $p^2 + 16q = 1400$

           Supply function : $700 -p^2 + 10q = 0$

To Find : find the equilibrium quantity and equilibrium price.

Solution:

Demand function : $p^2 + 16q = 1400$  --A

Supply function : $p^2-10q=700$ ---B

Now to find the equilibrium quantity and equilibrium price.

Solve A and B

Subtract B from A

$p^2-10q -p^2-16q=700-1400$

$-26q=-700$

$26q=700$

$q=\frac{700}{26}$

$q=26.92$

So, equilibrium quantity = 26.92

Substitute the value of q in A

$p^2 + 16(26.92) = 1400$

$p^2 + 430.72 = 1400$

$p^2 = 1400- 430.72$

$p^2 = 969.28$

$p = \sqrt{969.28}$

$p = 31.13$

So, equilibrium price is $31.13