3. For a new diet pill, a quantity of 60 pills will e supplied at a price of $40

Question

3. For a new diet pill, a quantity of 60 pills will e supplied at a price of $40, while a quantity of 100 pills will be supplied at a price of $60. a. Write a linear supply function for this product. a. S(q)- The demand price for these diet pils is $47.50 for a quantity of 50 pills and this demand price decreases to $32.50 when the quantity is 80 pills. -IO b. Write a linear demand function for these pills. b. D(q)- c. Find the equilibrium price and quantity for these diet pills. 4. The cost function for flavored coffee at an unscale coffeehouse is gon in dollass b

Explanation / Answer

3) a)
change in price = 60-40 = 20$
change in quantity = 100-60 = 40 pills;
Rate of change in price with respect to quantity = 20/40 = 1/2;
Using point slope formula :
y-y1 = m (x-x1)
We get: supply as y and price as x we get:
y - 60 = 1/2 (x-100)
y = x/2 -50 + 60 = x/2 +10;
y= x/2 + 10 or x= 2(y-10) = 2y-20;
Supply : S(q) = 2P - 20;

b) Demand price is 47.5 $ for 50 pills and 32.5 $ for 80 pills
Change in pills quantity / change in price = (80-50)/ (32.5-47.2) = -30/15 =- 2pills /$

Thus, using point slope form we get
y-50 =- 2 (x-47.5)
y-50 = -2x + 95;
y = -2x +145 or
2x+y = 145;
So demand y = 145- 2x or
D(q) = 145-2x;

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