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

Question

Quizplus · Accepted Answer

In a perfectly competitive equilibrium, market demand equals market supply. Therefore, Q_D = Q_S. Substituting the given functions: 150 - P = 4P. Solving for P gives P = $30. Substituting P = $30 in either of the supply or demand functions gives us the quantity traded in the market. Q_D = 150 - 30 = 120, or Q_S = 4 * 30 = 120. Therefore, the equilibrium price is $30 and the quantity traded in the market is 120. Option C is the only one that matches this result.

Market Demand Is Given as QD = 150 - P

Market Demand Is Given as Q_D= 150 - P