Use the following general linear demand relation: $Q _ { d } = 680 - 9 P + 0.006 M - 4 P _ { R }$ where M is income and $P _ { R }$ is the price of a related good,R.If M = $15,000 and $P _ { R }$ = $20 and the supply function is $Q _ { 5 } = 30 + 3 p$ ,equilibrium price and quantity are,respectively,

Question

Quizplus · Accepted Answer

To find the equilibrium price and quantity, set the demand function equal to the supply function and solve for P. Substituting M = $15,000 and $P_R = $20$ into the demand equation gives $Q_d = 680 - 9P + 0.006(15000) - 4(20)$. Simplifying this gives $Q_d = 680 - 9P + 90 - 80 = 690 - 9P$. The supply function is $Q_s = 30 + 3P$. Setting $Q_d = Q_s$ gives $690 - 9P = 30 + 3P$, which simplifies to $660 = 12P$, or $P = $55$. Substituting $P = $55$ into either the demand or supply equation gives $Q = 195$.

Use the Following General Linear Demand Relation Qd=680−9P+0.006M−4PRQ _ { d } = 680 - 9 P + 0.006 M - 4 P _ { R }Qd​=680−9P+0.006M−4PR​

Use the Following General Linear Demand Relation $Q _ { d } = 680 - 9 P + 0.006 M - 4 P _ { R }$