Question

Question #d39b8

Answer 1

The equilibrium price would be when the Pdemand = Psupply. In this case the equilibrium price is 22 when the price per unit is 3.

Explanation:

Start by setting the equations equal to each other.
`25-Q=Q^2+2Q+7`
Then rearrange
`Q^2+3Q-18=0`
Solve for Q
`(Q+6)(Q-3)=0`
`Q=-6,3`
Since a negative supply value doesn't make sense, `Q=3`
Plugging Q backing into the original 2 equations, we find that Pdemand and Psupply are both equal to 22.

Drawing a graph allows you to find the answer without the algebra by graphing both lines separately and finding the point of intersection.