Suppose that the pizza demand function is d (p, y) = 60-10p+2y and the pizza supply function is s (p, pm) = 20p-20pm where p is the price of pizza, y is aggregate income, and pm is the price of materials. if y = 70 and pm = 5, then the equilibrium quantity is:

Question

Mathematics

Jayden Garcia

27 January, 00:55

Suppose that the pizza demand function is d (p, y) = 60-10p+2y and the pizza supply function is s (p, pm) = 20p-20pm where p is the price of pizza, y is aggregate income, and pm is the price of materials. if y = 70 and pm = 5, then the equilibrium quantity is:

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Tiara Dougherty · Answer 1

The equilibrium quantity is the value of p when the demand d and supply s is equal. Therefore we equate the two equations:

60 - 10p + 2y = 20p - 20pm

We are given that:

y = 70

pm = 5

p = ?

60 - 10p + 2 (70) = 20p - 20 (5)

200 - 30p = - 100

- 30p = - 300

p = 10