Suppose the Demand and Supply Curves for Shampoo Are Given

question 10

Multiple Choice

Suppose the demand and supply curves for shampoo are given by
Q^D = 18 - 5P
Q^S = -3 + 2P
Where Q^D is the quantity of shampoo demanded (in thousands of bottles) , Q^S is the quantity supplied, and P is the price of shampoo (in dollars per bottle) . The equilibrium price in this market is ____ and the equilibrium quantity is ____.

• A) $3; 3,000
• B) $3; 900
• C) $6; 6,000
• D) $2; 8,000

---

Definitions:

Fixed Overhead

Costs that do not vary with the level of production or sales volume, including rent, salaries, and insurance.

Monthly Lease Payments

Regular payments made for the use of property or equipment over a set period, typically agreed upon in a lease contract.

Production Equipment

The machinery and tools used in the production process to manufacture products.

Cost Of Goods Sold

The expenses directly linked to the creation of products a company sells, including both materials and labor costs.