Question : If the demand curve is a racing cycle, D = 80200 - 13P, and the supply curve is S = 6200 + 12P, what is the equilibrium quantity?
Option 1: 2960 units
Option 2: 31220 units
Option 3: 8750 units
Option 4: 41720 units
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Correct Answer: 41720 units
Solution : The correct option is 41720 units.
Demand (D) = 80200 - 13P,
Supply (S) = 6200 + 12P
For the equilibrium position,
Demand (D) should be equal to Supply (S)
80200 - 13P = 6200 + 12P
80200 - 6200 = 13P + 12P
74000 = 25P
P = 74000/25P = 2960
Now that you have the equilibrium price (P = 2960), you can find the equilibrium quantity by plugging this price into either the demand or supply equation. Let's use the demand equation:
D = 80200 - 13P => D = 80200 - 13(2960) => D = 80200 - 38480 => D = 41720 Units
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