Question

Suppose that the quantity supplied S and quantity demanded D of T-shirts at a concert are given by the following functions where p is the price. S(p)= - 250 + 60p D(p) = 1100 - 75p Answer parts (a) through (c). (a) Find the equilibrium price for the T-shirts at this concert. The equilibrium price is $ (Round to the nearest dollar as needed.) What is the equilibrium quantity? The equilibrium quantity is T-shirts (Type a whole number.) (b) Determine the prices for which quantity demanded is greater than quantity supplied. For the price $ the quantity demanded is greater than quantity supplied. (c) What will eventually happen to the price of the T-shirts if the quantity demanded is greater than the quantity supplied? A. The price will increase. B. The price will decrease.

Answer 1

Solutions U 1100 Given, s(P) = -250+60p D(P)= 1100 - 75p quantity Ssce) = -250+60p 350 (10,350) 200 100 HD(P) = 1100-750 + 90 5 10 15 20 >x price(P)→ (in $) (9) At equilibrium, SCP2= DCP) -) -250 +60p = 1100 -758 60p+75P = 1100 +250 135 P: 1350 .. Pa 1350 135 P= 10

For p =$10 s(P) = -250+ 60x 10 = -250 7600 .. s(P)= 350 350 Hence, the equilibrium quantity is T-shirts. (answer) P>$0 (b) From the graph D(P) > 5(P) for p($10. But P cannot be negative, there for Hence, For the price $0 O & [ 1.0 Canswer) the quantity demanded is greater than quantity supplied. (6) Market tries to reach to the equilibrium point Therefore, wer when quantity demanded is greater than equantity supplied, the price will increase Hence, the correct option is © B. The price will increase Canswer)