Market demand is given as Qd = 150 - P. Market supply is given as Qs = 4P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Question

Quizplus · Accepted Answer

In a perfectly competitive market, equilibrium occurs where quantity demanded equals quantity supplied (Qd = Qs). Substituting the given equations, we get 150 - P = 4P, leading to 5P = 150, so P = 30. Substituting P = 30 into either equation, Q = 150 - 30 = 120.

Market Demand Is Given as Qd = 150 - P