Suppose the market for a certain dosage of generic cholesterol-lowering statin drugs has a supply...

Question:

Suppose the market for a certain dosage of generic cholesterol-lowering statin drugs has a supply described by P = 15.88 + 0.19Q (with price measured in cents per capsule and quantity in millions of capsules per day) and a demand described by P = 98.74 - 1.25Q.

Calculate the equilibrium quantity (in million capsules per day).

(As above) Suppose the market for a certain dosage of generic cholesterol-lowering statin drugs has a supply described by P = 15.88 + 0.19Q (with price measured in cents per capsule and quantity in millions of capsules per day) and a demand described by P = 98.74 - 1.25Q.

Calculate the equilibrium price (in cents).

Market Equilibrium Price and Quantity:

In perfect competition, market price is determined by forces of supply and demand. In this sense, the market is the price maker and firms are price takers.

Answer and Explanation:

In perfect competition, the market equilibrium price is determined by forces of supply and demand.

By equating supply and demand equations, we can...

See full answer below.

Become a Study.com member to unlock this answer! Create your account

View this answer

Learn more about this topic:

Loading...
Calculating Equilibrium Price: Definition, Equation & Example

from Introduction to Macroeconomics: Help and Review

Chapter 3 / Lesson 8
455K

Related to this Question

Explore our homework questions and answers library