Solve the problem.Suppose that the supply and demand equations of a new CD at a store are given by q = 3p - 12 and respectively, where p is the unit price of the CD's in dollars and q is the quantity.(a) What is the supply when the price is $10?(b) What is the demand when the price is $10?(c) Find the equilibrium price and the corresponding number of units supplied and demanded. (d) Find where the two lines cross the horizontal axis and give an economic interpretation of these points.

Question

What will be an ideal response?

Answer 1

(a) 18
(b) 3
(c) (7, 9); The equilibrium price is $7 when 9 units are supplied and demanded.
(d) (4, 0), 
Economic interpretation: The intersection of the supply curve with the horizontal axis indicates the lowest price at which the store is willing to sell the CD's. The intersection of the demand curve with the horizontal axis is the highest price a consumer is willing to pay for the CD.