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

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Definitions:

Price Range

The spectrum or extent between the highest and lowest prices of a commodity over a given period.

Shut Down Point

The point at which a company's revenue is exactly equal to its variable costs and it ceases operations to minimize losses.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services in exchange for money.

Price

The sum of money anticipated, needed, or provided as compensation for something.