Question: a) A tire manufacturer estimates that q (thousand) radial tires will be purchased by wholesalers when the price is p = D(q) = -0.1q

a) A tire manufacturer estimates that q (thousand) radial tires will be purchased by wholesalers when the

a) A tire manufacturer estimates that q (thousand) radial tires will be purchased by wholesalers when the price is p = D(q) = -0.1q +90 dollars per tire, and the same numbers of tire will be supplied when the price is p = S(q) = 0.2q + q + 50 dollars per tire. i. Find the equilibrium price and quantity. (4 marks) ii. Determine the consumers' and producer's surplus at the equilibrium price. (8 marks) b) If marginal revenue function for a manufacturer's product is R'(x) = 200 20x - 3x, where x is in units, find: i. The demand function p = = f(x). ii. The revenue realized from selling the third to seventh unit. - (6 marks) (2 marks)

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Lets begin by answering part a first i To find the equilibrium price and quantity we set the demand equal to the supply Dq Sq 01q2 90 02q2 q 50 Now lets solve for q 03q2 q 40 0 q2 103q 4003 0 Using th... View full answer

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