Question

If demand curve for alphonso mangoes is d = 25000 -70p and supply curve is s = 10000 + 80p, find the equilibrium quantity?

Answer 1

The equilibrium quantity of alphonso mangoes in the market is 130,000.

Explanation:

The demand curve for the alphonso mangoes is given as d=25000-70p and the supply curve of the same is given as s=10000+80p where d and s represent the demand and supply of alphonso mangoes respectively and p denotes the per unit price of the alphonso mangoes.

Now,based on the concept of market equilibrium,the market demand has to be equal to market supply.

Therefore,based on the market equilibrium condition,we can state:-

$d=s$

$25000-70p=10000+80p$

$-70p-80p=-25000+10000$

$-150p=-15000$

$p=\frac{-15000}{-150}$

$p=1500$

Hence,the equilibrium price of alphonso mangoes in the market is 1500.

Now,plugging the value of equilibrium price in the supply function of alphonso mangoes,we get:-

$s=10000+80p$

$s=10000+80(1500)$

$s=10000+120,000$

$s=130,000$

Hence,the equilibrium quantity of alphonso mangoes in the market is 130,000.