The inverse supply equation for clay pots is P = 0.5Q ^S + 1; the inverse demand equation is P = -2Q^D + 15. Quantity is in thousands of units. What is the equilibrium price?

Question

Quizplus · Accepted Answer

The equilibrium price is found where Qs = Qd. Substituting the inverse supply and demand equations into each other, we get:0.5Qs + 1 = -2Qd + 150.5Qs = -2Qd + 14Qs = -4Qd + 28Setting Qs = Qd, we get:-4Qd + 28 = Qd5Qd = 28Qd = 5.6Substituting Qd = 5.6 into either the inverse supply or demand equation, we get:P = 0.5(5.6) + 1 = $3.80Therefore, the equilibrium price is $3.80.

The Inverse Supply Equation for Clay Pots Is P =