Question

Suppose the demand function​ (D) for golf clubs​ is: Qequals=180180minus−0.500.50​P, where P is the price paid by consumers in dollars per club and Q is the quantity demanded in thousands. Suppose the supply curve​ (S) for golf clubs is estimated to​ be: Qequals=2.002.00P. Calculate the equilibrium price for golf clubs and the equilibrium quantity sold. The equilibrium price is ​$7272 per club ​(Enter your response as an​ integer.)​, and the equilibrium quantity is 144144 thousand clubs ​(Enter your response as an integer.​) Suppose instead that golf club producers agree to charge a price of ​$5252 per club. This would result in a shortage of 1010 thousand clubs ​(Enter your response as an integer.​)

Answer 1

Answer:

Explanation:

In demand and supply theory, equilibrium price and quantity is established where both these curves intersect, like when seen in a graph shown below:

So as you can see, the point of equilibrium is at the intersection of D and S.

From this point of we, mathematically, a this point D= S. So for finding out what the price and quantity at this ambit exists., you have to equate the demand and simply functions to calculate the equilibrium values. Since D S, we have

$240 - 1.50P = 1.00P$

NOTE: Since Pm not sure whether 1.00P is actually 100P or simply 1.00P, I use the former verbal. If its 100P, you can always use it after I tell you the full method_  

$240 =1.5P\\ 160 = P$

There you have it the equilibrium price. Substitute this value into any one of the above 000110115 50 to get the equilibrium quantity at this price.

There you have it, the equilibrium price. Substitute this Value into any one of the above functions so to get the equilibrium quantity at this price.

$Q = 240 - 1.00P \\Q =240 -1.00(160) \\Q= 240 - (160) \\Q = 160$

And there you haws it the equilibrium quantity_ Th., 0. point, equilibrium price and numbly scan to be the same.

Now let's assume the price of golf clubs rode up to 5160 from 1140. Substitute this value to any of the functions above like we already did so and out Ox new quantity.

Q= 240 — 0.50( 140)

Q = 170

Thus, quantity demanded will reduce from 160 thousand clubs to I70 thousand clubs. This is pretty much understandable since the supply curve moved to the left but demand remained constant thus increasing the price but decreasing the quantity.