Market demand is given as Qd =150 - 3P. Market supply is given as Qs = 2P. 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 (Qd) must equal market supply (Qs). Setting Qd equal to Qs and solving for P, we get:
150 - 3P = 2P
150 = 5P
P = $30
Substituting P back into either Qd or Qs, we get:
Qd = 150 - 3($30) = 60
Qs = 2($30) = 60
Therefore, the equilibrium price will be $30 and the equilibrium quantity traded in the market will be 60.

Market Demand Is Given as Qd =150 - 3P