Equilibrium Price: Cell Phones Worldwide quarterly sales of Nokia® cell ph...

Equilibrium Price: Cell Phones Worldwide quarterly sales of Nokia® cell phones were approximately q = −p + 156 million phones when the wholesale price was $p.

a. If Nokia was prepared to supply q = 4p − 394 million phones per quarter at a wholesale price of $p, what would have been the equilibrium price?

b. The actual wholesale price was $105 in the fourth quarter of 2004. Estimate the projected shortage or surplus at that price. HINT [See Quick Example on page 62 and also Example 4.]

Reference: Example 4

Reference: Quick Example