Question: The inverse demand function is P = 110 0.5q, and the inverse supply function is P = 320 +5q - 20r, where r is

The inverse demand function is P = 110 – 0.5q, and the inverse supply function is P = 320 +5q - 20r, where r is the rental cost of capital. 

a) Show how the equilibrium price and quantity vary with r? 

b) Graph the demand and supply curve given that the rental cost of capital is 1. 

c) Calculate the slope of the demand and supply curve given that the rental cost of capital is 1.

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