The demand equation for a certain brand of GPS Navigator is x + 5p - 425 = 0, where x is the quantity demanded per week and p is the wholesale unit price in dollars. The supply equation is x - 17p + 1,005 = 0, where x is the quantity the supplier will make available in the market when the wholesale price is p dollars each. Find the equilibrium quantity and the equilibrium price for the GPS Navigators.
A) equilibrium quantity 100 units; equilibrium price $65
B) equilibrium quantity -10 units; equilibrium price $70
C) equilibrium quantity -10 units; equilibrium price $65
D) equilibrium quantity 100 units; equilibrium price $70

Question

Quizplus · Accepted Answer

To find the equilibrium quantity and price, set the demand equation equal to the supply equation and solve for p. Demand equation: x + 5p - 425 = 0. Supply equation: x - 17p + 1,005 = 0. Equating both: 5p - 17p = 1,005 - 425. Solving for p gives the equilibrium price, and substituting back into either equation gives the equilibrium quantity.

The Demand Equation for a Certain Brand of GPS Navigator