Question

The figure below represents the market for 36 inch by 42 inch insulated wood casement windows. The demand and supply of these windows (in thousands) is given by the following equations, where p hundred dollars is the price of a single window. D(p) = -p? + 78.5 0.3p? + 5p - 1 np 4.25 0 Otherwise S(p) = Check: D(5) = 53.5 and S(5) = 31.5 thousand wood windows DXP) SCP) (6.13, 40.923)

Answer 1

Date : D(p) = -p² +78.5 S(p) Jo.3 p + sp-1 when p7, 4:25 0 o.w D(5) -5?+78. 5(5) 0.3 (52) + s(5) - 4:574.25) 53.5 315 i) when p. 7.10 then 0 (7.10) 7.10² +78.5 28.09 equilibrium is at the point do where 0.BD +5P-120.-p? + 7815 1.3 p + sp-79.5 ♡ ÞE -5 I 15 2-4 (1.3x (-79.5)) 2x1.3 - $6.13 sCp) - 40.923 DCP) - 40.923 At p=4.25 , S(p) 0.3 (4.252) + 5(4:25) - | % 25.67 2 . Producer Surplus: 1₂ ( 60-923 - 25.67) (6. 13 -4.25) & 14.338

in ) At D(P) = 0 8.86 Þ 278.5 5 c. 6 at equilibrium < (8.86 - 6.13) (40.923-0) 2 $ 55.86 3. T. S at equilibrium (at equi.) c.s+ P.S 10 55.86 + 14.338 • $70:20 E Ed P 9 dP elasticity is negative 15 X - 2 p * - p²+78.5 +(- p² + 78.5)= -2p2 to p²-78.5 = -2p2 20 þ 78.5 3 » p =$5.12 25