The number of wrenches that can be produced at a given price can be predicted by the formula , where is the supply (in thousands) and is the price (in dollars). If the demand for the wrenches can be predicted by the formula , find the equilibrium price.
A) $5
B) $4
C) $3
D) None of the above

Question

The number of wrenches that can be produced at a given price can be predicted by the formula  , where  is the supply (in thousands) and  is the price (in dollars). If the demand  for the wrenches can be predicted by the formula  , find the equilibrium price.
A) $5 
B) $4 
C) $3 
D) None of the above

Quizplus · Accepted Answer

To find the equilibrium price, we need to set the supply equal to the demand:

11ec1e8e_2c0c_1046_be9b_85a1b7d18c18_TBX8967_11 = 11ec1e8e_2c0c_375a_be9b_8fd0204dc279_TBX8967_11

Solving for P:

11ec1e8e_2c0c_3758_be9b_ef8844412edc_TBX8967_11 = 0.5

So the equilibrium price is $3.

The Number of Wrenches That Can Be Produced at a Given