The market equilibrium point for a product is reached when 11000 units are produced and sold at $24 per unit. The manufacturer will not produce any units at the price of $3, and the customers will not buy any at the price of $61.Find the supply and demand equations, assuming they are linear. The equations should express price p in terms of quantity q.

Explanation:

Let the demand equation be P = X + YQat P = $24, Q = 11000units24 = X + 11000Yequation 1when P = $61, Q = 0units 61 = X

Substitute the value of X in equation 1

24 - X = 11000YY = 24 - 61 /11000Y = - 0.00336hence demand equation ; P = X + YQ , P =61 - 0.00336Q

Similarly, let the supply equation be P = Z + wQ

at P = $24, Q = 11000units24 = Z + 11000wequation 2at P = $3, Q = 0from equation P = Z + wQ, 3 = Zhence Z = 3

Substitute the value of Z in equation 2

24 = Z + 11000w, but Z = 324 - 3/11000 = ww = 0.00191hence the supply equation becomes, P = 3 + 0.00191w

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