Business and Economics Supply and Demand Suppose that the demand and price for a
ID: 3143276 • Letter: B
Question
Business and Economics Supply and Demand Suppose that the demand and price for a certain model of a youth wristwatch arc related by p = D(q) = 16 - 1.25q, where p is the price (in dollars) and q is the quantity demanded(in hundreds). Find the price at each level of demand. (a) 0 watches (b) 400 watches (c) 800 watches Find the quantity demanded for the watch at each price. (d) $8(e) $10 (f) $12 (g) Graph p = 16 - 1.25q. Suppose the price and supply of the watch are related by p = S(q) = 0.75q, where p is the price (in dollars) and q is the quantity supplied (in hundreds) of watches. Find the quantity supplied at each price.Explanation / Answer
p = 16 - 1.25q
(a) 0 watches
p = 16 - 1.25*0 = 16
p = $16 for 0 watches
(b) 400 watches i.e. q=4
p = 16 - 1.25*4 = 11
p = $11 for 400 watches
(c) 800 watches i.e. q=8
p = 16 - 1.25*8 = 6
p = $6 for 800 watches
Quantity demanded
p = 16 - 1.25q
q = -(p - 16)/1.25
(d)$8
q = -(8 - 16)/1.25 = 8/1.25 = 4
q = 400 watches for $8
(e) $10
q = -(10 - 16)/1.25 = 6/1.25 = 4.8
q = 480 watches for $10
(f) $12
q = -(12 - 16)/1.25 = 4/1.25 = 3.2
q = 320 watches for $12
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