Chapter 1.2, Problem 27E

Business and Economics

27. Supply and Demand Suppose that the demand and price for a certain model of a youth wristwatch are 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.

1. (a) 0 watches
2. (b) 400 watches
3. (c) 800 watches

  Find the quantity demanded for the watch at each price.

1. (d) $8
2. (e) $10
3. (f) $12
4. (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.

1. (h) $0
2. (i) $10
3. (j) $20
4. (k) Graph p = 0.75q on the same axis used for part (g).
5. (l) Find the equilibrium quantity and the equilibrium price.