Market demand is given as Qd = 200 - 2P. Market supply is given as Qs = 2P + 40. What would result if the market price were $10?

Question

Quizplus · Accepted Answer

At the market price of $10,
Qd = 200 - 2P = 200 - 2(10) = 180
Qs = 2P + 40 = 2(10) + 40 = 60
Since Qd < Qs, there is a shortage in the market. The shortage is calculated as:
Qs - Qd = 60 - 180 = -120, which means there is a shortage of 120 units.

Market Demand Is Given as Qd = 200 - 2P