In: Economics
The Kingdom of Monkey has determined that the demand for the country’s automobile tires is given by QD = 3,200 -25P, where Q = the number of tourists served each month and P is the price per roundtrip tour on a river boat for each couple. The supply of romantic river-boat tours is given by QS = 15P - 800
What is the Supply Choke price?
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We know that equilibrium is when quantity demanded = quantity supplied
Thus Qd =Qs
OR 3200 - 25P = 15P - 800
OR 4000 = 40P
OR 1000 = P
Hence supply choke price is 1000