Suppose the market for a certain dosage of generic cholester

Suppose the market for a certain dosage of generic cholesterol-lowering statin drugs has a supply described by P=15.88+0.19Q (with price measured in cents per capsule and quantity in millions of capsules per day) and a demand described by P=98.74-1.25Q. Calculate the equilibrium price (in cents). (Format tips: Answers must be within 0.2 of the true value to be counted a correct, so do not round too early. Do not include commas, dollar signs, or cent signs.)

Solution

P = 15.88 + 0.19Q or 0.19Q = P – 15.88 or Qd = (P-15.88) / 0.19

P = 98.74 – 1.25Q or -1.25Q = P – 98.74 or Qs = (P – 98.74) / 1.25

Qd = (P – 15.88) / 0.19 = (P – 98.74) / 1.25 = Qa

(P – 15.88) / 0.19 – (P – 98.74) / 1.25 = 0

5.26P – 83.57 – 0.8P + 78.99 = 0

4.46P – 4.58 = 0

4.46P = 4.58; P = 4.58 / 4.46 = 1.02 cents.

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