The demand function for x is D(p)= 65 - 2p and the supply function is S(p)= 20 + p.The price that should be set to restrict the quantity supplied to 30 units is closest to
A)$5.
B)$10.
C)$15.
D)$50.
E)$55.

Question

Quizplus · Accepted Answer

To restrict the quantity supplied to 30 units, we need to set the supply function equal to 30 and solve for price:

$30 = 20 + p \cdot 10$

$10p = 10$

$p = 1$

Now that we have the price, we can find the corresponding demand:

$Q = D(1) = 65 - 2 \cdot 1 = 63$

Since the quantity demanded is greater than the restricted quantity supplied (63>30), this price will restrict the quantity supplied to 30 and reach equilibrium.

Therefore, the best choice is B, $10.

The Demand Function for X Is D(p)= 65 - 2p