Assume That the Supply and Demand Functions for a Commodity

question 23

Multiple Choice

Assume that the supply and demand functions for a commodity are as follows: Supply: q = 200p; Demand: q = 4,200 - 400p.
Find the equilibrium price and the corresponding equilibrium quantity.

• A) The equilibrium price is $8 when equilibrium quantity is 1,400 items.
• B) The equilibrium price is $7 when equilibrium quantity is 1,300 items.
• C) The equilibrium price is $7 when equilibrium quantity is 1,400 items.
• D) The equilibrium price is $7 when equilibrium quantity is 1,600 items.
• E) The equilibrium price is $6 when equilibrium quantity is 2,400 items.

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Definitions:

Merchant

An individual or business entity engaged in the selling and purchasing of goods or services, often involved in trade at a larger scale.

Destroyed

To damage something so badly that it no longer exists, works, or has value.

Common Carrier

is a person or company that transports goods or people for any person or company and that is responsible for any possible loss of the goods during transport.

Independent Contractor

A person or entity engaged in a work performance agreement who is not considered an employee and does not receive employee benefits.