The demand for your college newspaper is 1800 copies per week if the paper is given a way free of charge, and the demand drops to 900 if the charge is $0.10 per copy. However, the university is prepared to supply only 700 copies per week free of charge but will supply 950 per week at $0.25 per copy. At what price should the college newspapers be sold so that there is neither a surplus nor a shortage of papers ?
A)$0.07
B) $0.06
C) $0.22
D) $0.17
E) $0.11

Question

The demand for your college newspaper is 1800 copies per week if the paper is given a way free of charge, and the demand drops to 900 if the charge is $0.10 per copy. However, the university is prepared to supply only 700 copies per week free of charge but will supply 950 per week at $0.25 per copy. At what price should the college newspapers be sold so that there is neither a surplus nor a shortage of papers  ?
A)$0.07
B) $0.06
C) $0.22
D) $0.17
E) $0.11

Quizplus · Accepted Answer

To find the equilibrium price where demand equals supply, we can set up the demand and supply equations based on the given data. The demand decreases by 900 copies when the price increases by $0.10, and the supply increases by 250 copies when the price increases by $0.25. Solving these equations, the equilibrium price is found to be $0.11.

The Demand for Your College Newspaper Is 1800 Copies Per