If the current price of a good is $10,market demand is $Q _ { d } = 400 - 20 P$ ,and market supply is $Q _ { s } = - 50 + 10 P$ ,then

Question

Quizplus · Accepted Answer

At the current price of $10, we can find the equilibrium quantity by setting the market demand equal to the market supply, and solving for P:
\begin{align*}
Q_d &= Q_s \
400 - 20P &= -50 + 10P \
450 &= 30P \
P &= 15
\end{align*}

So the equilibrium quantity is:

\begin{align*}
Q_d = Q_s &= 400 - 20(15) \
 &= -50 + 10(15) \
 &= 100
\end{align*}

Since the current price of $10 is below the equilibrium price of $15, there will be excess demand or a shortage:

\begin{align*}
Q_d - Q_s &= 400 - 20(10) - (-50 + 10(10)) \
&= 150
\end{align*}

So the answer is D, because a lower price will increase the shortage, and there is currently excess demand or a shortage of 150 units.

If the Current Price of a Good Is $10,market Demand Qd=400−20PQ _ { d } = 400 - 20 PQd​=400−20P

If the Current Price of a Good Is $10,market Demand $Q _ { d } = 400 - 20 P$