Work the following exercise. (See Examples 1 – 4.)
Let the supply and demand for bananas in cents per pound be given by
(a) Graph these equations on the same axes.
(b) Find the equilibrium quantity.
(c) Find the equilibrium price.
(d) On what interval does demand exceed supply?
Example 1
Joseph Nolan has studied the supply and demand for aluminum siding and has determined that the price per unit, * p, and the quantity demanded, q, are related by the linear equation
Example 2
Suppose the economist in Example 8 concludes that the supply q of siding is related to its price p by the equation
Example 3
The supply and demand curves of Examples 8 and 9 are shown in Figure 3.22 . Determine graphically whether there is a surplus or a shortage of supply at a price of $40 per unit.
Example 4
In the situation described in Examples 8 – 10, what is the equilibrium quantity? What is the equilibrium price?
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