A retail chain will buy900cordless phones if the price is$30each and800if the price is$40.A wholesaler will supply350phones at$40each and1400at$70each. Assuming that the supply and demand functions are linear, find the market equilibrium point and explain what it means.

It is provided that the supply and demand functions are linear. From the given information it is…

Answered: retail chain will buy 900 cordless…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 6E

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A retail chain will buy

900

cordless phones if the price is

$30

each and

800

if the price is

$40.

A wholesaler will supply

350

phones at

$40

each and

1400

$70

each. Assuming that the supply and demand functions are linear, find the market equilibrium point and explain what it means.

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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