At what value of p does supply equal demand? At p=?, supply equals demand

Question

The price per unit, p, and the demand, x, for a particular material are related by the linear equation p=40-2/5x, while the supply is given by the linear equation p=2/5x, (this is shown is a graphed figure where the lines intersect)

At what value of p does supply equal demand? At p=?, supply equals demand

Answer 1

The price at which supply equals demand is called the equilibrium price. To find it, you set the two expressions for p equal to each other, solve for x, then find p using one of them.

 

40 - (2/5)x = (2/5)x

 

40 = (4/5)x

 

x = 40(5/4) = 50.

 

The equilibrium price is then p = (2/5)(50) = $20. This assumes dollars as the unit of currency. If it is cents or something else, you must adjust the answer accordingly.