L Supply and DemandIn a free market economy, the price of a product is determined by therelationship between supply and demand. Suppliers are more willing to supply aproduct at higher prices. So when the price is high, supply is high. On the otherhand, consumers of a product are generally less willing to buy a product athigher prices. So when the price is high, demand is low.In a free competitive market, the price of a product tends to move toward anequilibrium price, in which the supply and demand are equal; that commonvalue of the supply and demand is the equilibrium quantity. To find theequilibrium price, we solve the system consisting of the price-supply and price-demand equations. At a price of $4.74 per pound, the supply for cherries is 16,349 pounds, and thedemand is 10,103 pounds. When the price drops to $4.36 per pound, thesupply decreases to 10,603 pounds and the demand increases to 12,743pounds. Assume that the price-supply and price-demand equations are linear.What is the equilibrium price?$per pound. Round to the nearest cent.

The law of supply and demand is a hypothesis that makes sense of the communication between the…

Supply and Demand In a free market economy, the price of a product is determined by the relationship between supply and demand. Suppliers are more willing to supply a product at higher prices. So when the price is high, supply is high. On the other hand, consumers of a product are generally less willing to buy a product at higher prices. So when the price is high, demand is low.

Supply and Demand In a free market economy, the price of a product is determined by the relationship between supply and demand. Suppliers are more willing to supply a product at higher prices. So when the price is high, supply is high. On the other hand, consumers of a product are generally less willing to buy a product at higher prices. So when the price is high, demand is low.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 8PA

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