Supply and Demand In many applications of economics, as the price of an item goes up, demand for the item goes down and supply of the item goes up. The price where supply and demand are equal is the equilibrium price, and the resulting sup.
ply or demand is the equilibrium supply or equilibrium demand. Suppose the supply of a product is related to its price by the equation
$$p=\frac{2}{3} q$$
where $p$ is in dollars and $q$ is supply in appropriate units. (Here, $q$ stands for quantity.)
Furthermore, suppose demand and price for the same product are related by
$$p=-\frac{1}{3} q+18$$
where $p$ is price and $q$ is demand. The system formed by these two equations has solution $(18,12),$ as seen in the graph.
(GRAPH CANNOT COPY)
Suppose the demand and price for a certain model of electric can opener are related by $p=16-\frac{5}{4} q$, where $p$ is price, in dollars, and $q$ is demand, in appropriate units. Find the price when the demand is at each level.
(a) 0 units
(b) 4 units
(c) 8 units