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Sandhya_sharma, Master's Degree

Category: Math Homework

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Suppose that the supply function is

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Suppose that the supply function for honey is p=S(q)=0.3q+2.7, where p is the price in dollars for an 8-oz container and q is the quantity in barrels. Suppose also that the equilibrium price is $4.50 and the demand is 2 barrels when the price is $6.10. Find an equation for the demand function, assuming it is linear.

Hi, Thanks for using Justanswer! Suppose that the supply function for honey is p=S(q)=0.3q+2.7, where p is the price in dollars for an 8-oz container and q is the quantity in barrels. Suppose also that the equilibrium price is $4.50 and the demand is 2 barrels when the price is $6.10. Find an equation for the demand function, assuming it is linear. Solution: Let us find the demand when price is $4.50 since equilibrium price is $4.50 so supply and demand at that price will be equal. Put p = 4.5 in p=0.3q+2.7 4.5 =0.3q+2.7 4.5-2.7 = 0.3q 1.8 = 0.3q q = 1.8/0.3 = 6 Now we have demand is 2 barrels when the price is $6.10 and also demand is 6 barrels when the price is $4.5. slope = (4.5-6.10)/(6-2) = -0.4 demand equation will be p-6.1 = -0.4(q-2) p-6.1 = -0.4q+0.8 p = -0.4q+6.9 demand function will be p =D(q) = -0.4q+6.9 Answer: p =D(q) = -0.4q+6.9 I hope it will help you. Please don't forget to rate my answer! Thanks