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Given an economic relationship between the price p and the selling quantity q for some product, expressed by a demand function of p=600-3q and a supply function of p=100+2q, find the equilibrium price.
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300 |
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100 |
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50 |
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400 |
Explanation
First, solve for q by equating 600-3q and 100+2q. We know they must be equal, because they both equal p. We solve for q by subtracting 100 from both sides, leaving 500-3q=2q, then adding 3q to both sides, leaving 500=5q. Q must be equal to 100. But we need to find p, not q. We can get p by substituting 100 for q into either of the original supply or demand functions. Let's use the supply function p=100+2q, which becomes p=100+(2*100). Obviously, p=300.
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