Question
Asked Dec 5, 2019
12 views

 A retail chain will buy 900 cordless phones if the price is $10 each and 400 if the price is $60.  A wholesaler will supply 700 phones at $30 each and 1400 at $50 each.  Assuming that the supply and demand functions are linear, find the market

check_circle

Expert Answer

Step 1

It is given that

help_outline

Image Transcriptionclose

the demand and supply functions are linear. Also, it is clear from the given question that, the demand function passes through the points (10,900) and (60, 400). and the supply function passes through the points (30, 700) and (50,1400).

fullscreen
Step 2

We can write the demand and...

help_outline

Image Transcriptionclose

Demand function 400 – 900 (х — 10) y – 900 60 – 10 -500 -(х — 10) 50 y – 900 => - (1) 3> у %3D -10х + 1000 Supply function 1400 – 700 y – 700 (х — 30) 50 – 30 700 (х — 30) 20 => y – 700 3D> у %3D 35х — 350 (2)

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in