1. Limited time only! Sign up for a free 30min personal tutor trial with Chegg Tutors
    Dismiss Notice
Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

Econ equilibrium problem

  1. Dec 5, 2012 #1
    1. The problem statement, all variables and given/known data

    Assume Harvard has the following marginal cost equation and acts like a competitive firm:
    MC = 10X + 100

    The aggregate demand for education at the College is:
    X^D("D" simply stands for demand)= 200 - .5p

    The demand function above does not account for an additional bene t to society from education.
    Speci cally, society bene ts $6 per unit of education consumed.

    What is the equilibrium price and quantity of education units (X) if there is no government
    intervention.


    2. Relevant equations

    Equilibrium occurs when supply equals deman


    3. The attempt at a solution

    I have MC, which I know also equals the supply. But the thing that throws me off with this problem is the presence of different variables. I cannot solve for X by setting the two equations together because of the existence of the P variable.

    Any ideas on how to approach this?

    Thanks!
     
    Last edited: Dec 5, 2012
  2. jcsd
  3. Dec 5, 2012 #2

    Mark44

    Staff: Mentor

    What does X represent in this equation?
    Is this really XD or did you mean XD? As you wrote it, it means X to the power D.

    What is p in the demand equation? Price? If so, in what units?
     
Know someone interested in this topic? Share this thread via Reddit, Google+, Twitter, or Facebook




Similar Discussions: Econ equilibrium problem
  1. Currency econ homework (Replies: 6)

  2. Forces in Equilibrium (Replies: 2)

  3. Econ Math Problem! (Replies: 2)

Loading...