The sunshine bakery sells pies at a fixed price o p dollars per pie. The total number of pies demanded daily, D, is related to the price, p, in dollars by the equation:
D = -10p + 200
On the other hand, the daily supply of pies, S, is related to the price, p, per pie by the equation.
S = 15p - 50
Determine the equilibrium price of pies; that is, the price at which supply, S, and demand, D, are equal.
S=D
15p-50 = -10p+200
25p = 250
p = 10
To determine the equilibrium price of pies, we need to find the price at which the demand (D) and supply (S) are equal. This is the point where the quantity of pies demanded by customers matches the quantity of pies supplied by the bakery.
The given equations are:
D = -10p + 200 (Demand)
S = 15p - 50 (Supply)
To find the equilibrium price, we need to set these two equations equal to each other:
-10p + 200 = 15p - 50
Now, we can solve this equation to find the value of p, which represents the equilibrium price.
First, let's rearrange the equation to isolate the variable p:
-10p - 15p = -50 - 200
-25p = -250
p = (-250) / (-25)
p = 10
Therefore, the equilibrium price of pies is $10. At this price, the quantity demanded will equal the quantity supplied, resulting in market equilibrium.