Consider a demand and supply scenario for 3-D glasses. An independent contracting firm was so kind and estimated the supply curve as a function of the quantity x as s(x)=.06x2 + 1.8 x + 60 and the demand as d(x)= -.075 x2 – 1.5x +180.a) Solve for the equilibrium quantity and price. What condition has to hold in an equilibrium? For full credit you must show ALL steps of your algebra.b) Graph the supply and demand curve. Clearly mark the proper price and quantity intercept. Show how you calculated the intercepts.

Question
Asked Sep 24, 2019
62 views

Consider a demand and supply scenario for 3-D glasses. An independent contracting firm was so kind and estimated the supply curve as a function of the quantity x as s(x)=.06x2 + 1.8 x + 60 and the demand as d(x)= -.075 x2 – 1.5x +180.

a) Solve for the equilibrium quantity and price. What condition has to hold in an equilibrium? For full credit you must show ALL steps of your algebra.

b) Graph the supply and demand curve. Clearly mark the proper price and quantity intercept. Show how you calculated the intercepts.

check_circle

Expert Answer

Step 1

(a)

The combination of demand and supply forces determine what amount of goods to be produced and consumed in an economy and at what price. These stable values of price and quantity are known as equilibrium price and equilibrium quantity respectively.

Given

help_outline

Image Transcriptionclose

Given S(x) 0.06x21.8x + 60 D(x)0.075x2-1.5x +180

fullscreen
Step 2

For economy to be in equilibrium, demand and supply forces must be equal. Thus, according to this necessary condition of equilibrium, the intersection point of demand and supply curves determine equilibrium price and equilibrium quantity.

Thus, for equilibrium price and quantity

Equate given supply and demand equations

help_outline

Image Transcriptionclose

0.06x21.8x60 = -0.075x2 - 1.5x +180 0.135.x2+3.3.x120= 0

fullscreen
Step 3

Using the discrimin...

help_outline

Image Transcriptionclose

D b2-4ac D 220 (4)x(9)x(-8000) D 48400288000 D 336400 - -btvb-4ac x = 2a -220t336400 (2x9) -220 580 x = 18 x 20 x 44.44,rejected as quantity cannot be negative Thus, equilibrium quantity is 20

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

Business

Economics

Related Economics Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: 1. How would you characterize the strategy for competing internationally that Ford was pursuing prio...

A:  Alan Mulally was appointed as Ford CEO in 2006 after a long career at Boeing; he was astonished to ...

question_answer

Q: 1. Which groups benefitted the most from China imposing an export quota on rare earth metals? Did it...

A: Rare earth metals are made up of 17 chemical elements that are useful in manufacturing many high-tec...

question_answer

Q: When thinking of the United States in terms of democracy, the right to vote was far from universal b...

A: Implicit with the democratic self-image, the democracy constitutes a right to vote which has resulte...

question_answer

Q: A commercial bank will become illiquid if A) it has short-term liabilities that exceed its short-ter...

A: Click to see the answer

question_answer

Q: Saved The accompanying table shows real GDP from 2010 to 2015 for China, measured in billions of 200...

A: (a) Completed table is given below

question_answer

Q: a. On the demand curve graph, place the end points of the demand curve such that at a quantity of 2 ...

A: Demand Curve: It refers to the curve that represents the relation between the demand for a commodity...

question_answer

Q: Company X is going to buy a total of 4 ads. They are going to advertise in the newspaper or on the r...

A: Advertisement: the advertisement is the business tactic through which a business entity maximizes it...

question_answer

Q: If the Fed wants to increase the money supply, it will ______ Treasury bonds. A) buy B) sell C) hold...

A: The correct option is A.

question_answer

Q: Let’s say that Marianne is a politician who promises cheaper gasoline for everyone in the country if...

A: From the aforementioned question, it can be stated that Marianne is one of the politicians who are c...