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26 February, 02:42

The supply in thousands of items, for custom phone cases can be modeled by the equation p = 75+8x, while demand can be while the demand can be modeled by p=190-15x, where p is in dollars. Find the equilibrium price and quantity, the intersection of the supply and demand curves.

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  1. 26 February, 06:08
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    At equilibrium, the market demand of custom phone cases will be equal to the market supply of custom phone cases.

    Market demand function -

    p = 190 - 15x, where p is the price and x is the quantity of goods

    Market supply function -

    p = 75 + 8x

    Thus, at equilibrium the market demand function will be equal to market supply function.

    Hence,

    190 - 15x = 75 + 8x

    23x = 190-75

    23x = 115

    x = 5 units

    Substituting the value of x in market supply function, we get -

    p = 75 + 8 * 5

    = 75 + 40 = $ 115

    Hence, equilibrium quantity and price are 5 units and $ 115 respectively.

    Thus, at (5, 115) the market demand and supply curves of Custom phone cases will intersect each other.

    Explanation:

    Refer to the answer.
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