Question

Worldwide quarterly sales of a brand of cell phones were approximately q = −p + 136 million phones when the wholesale price was $p. (a) If the cellphone company was prepared to supply q = 9p − 374 million phones per quarter at a wholesale price of $p, what would have been the equilibrium price?

Answer 1

Answer:

$51

Explanation:

Data provided:

Sales function as: ( q = −p + 136 ) million phones

here, p is price in dollars

a) supply function as: ( q = 9p - 374 ) million phones

now,

for equilibrium price, the supply should be equal to the sales

i.e

−p + 136 = 9p - 374

or

136 + 374 = 9p + p

or

10p = 510

or

p = $51

Hence, the equilibrium price should be $51