You can sell 70 pet chias per week if they are marked at $1 each, but only 20 each week if they are marked at $2/chia. Your chia supplier is prepared to sell you 10 chias each week if they are marked at $1/chia, and 60 each week if they are marked at $2 per chia.
(a) Write down the associated linear demand and supply functions.
demand function q(p) =
supply function q(p) =
(b) At what price should the chias be marked so that there is neither a surplus nor a shortage of chias?
(a) The slope of the demand function is given by: demand function (70 -20)/(1 -2) = 50/-1 = -50 thus, the... View the full answer