Correct Answer: A 16.34 Suppose that King Kanuta, whom you met in your workbook,

Question

Correct Answer: A 16.34 Suppose that King Kanuta, whom you met in your workbook, demands that each of his subjects give him 4 coconuts for every coconut that they consume. The king puts all of the coconuts that he collects in a large pile and burns them. The supply of coconuts i given by S(%) = 100ps, where p, is the price received by suppliers. The demand for coconuts by the king's subjects is given by Dipd) 9,360-100pa, where pa is the price paid by consumers. In equilibrium, the price received by suppliers will be: (a) 18 (b) 27 (c) 46.80 (d) 234 (e) None of the above

Explanation / Answer

At equilibrium: Demand = Supply

100p = 9360 - 100p

200p = 9360

p = 46.8

Option c is correct

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