SOLUTION: The function S=5000 +200x and D=9500-100x express the supply S and the demand D, respectively, for a popular compact disc brand as a function of its price x (in dollars). a) Gr

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Question 120494: The function S=5000 +200x and D=9500-100x express the supply S and the demand D, respectively, for a popular compact disc brand as a function of its price x (in dollars).
a) Graph the functions on the same coordinate system.
b) What happens to the supply as the price increase?
c) What happens to the demand as the price increases?
d) The price at which supply and demand are equal is caled the equilibrium price. What is the equilibrium price?
Answer by nabla(475) About Me  (Show Source):
You can put this solution on YOUR website!
a) I am going to plot this quickly, I assume you are able to do this and are just having difficulty with b-d. If this is not the case, E-mail me and I will explain how to plot linear functions.
graph%28300%2C300%2C-10%2C30%2C-1000%2C11000%2C5000%2B200x%2C9500-100x%29
The supply curve is the upward sloping curve, and the demand curve is the downward sloping curve.
b) Note, from above, that the supply curve is upward sloping. This means that an increase in x results in an increase in y (supply).
c) Note, from above, that the demand curve is downward sloping. This means that an increase in x results in a decrease in y (demand).
d) Set S=D.
5000%2B200x=9500-100x
gives 300x=4500
x=15
This is the equilibrium price.

These explanations have been purely mathematical. I can offer more intuitive explanations about what is happening according to economics, but you will have to E-mail this to me as it is mostly off-topic.