A recent market analysis has shown that the supply and deman

A recent market analysis has shown that the supply and demand of blenders are both linear functions of price.

Solution

D(p) = 2400-40P

It is given that at price 10, demand is 2000

It is also given that with every$ 1 increase in price, demand decreases by 40 units.

It means X-40(10) = 2000

X = 2400

Hence demand function = 2400-40P

S(p) = -1100+30P

It is given supply at $10 is 1400

-X+30(10) = 1400

X = -1100

At equilibrium

2400-40P = 1100+30P

70P = 3500

P = 50

Q = 2400-40(50) = 400 units.