The market demand for cars is P = 1000 - Q and the supply is P = 100 + 2Q. An effective quota is:

Question

Quizplus · Accepted Answer

To find the effective quota, we need to set the quantity demanded equal to the quantity supplied and solve for Q.

1000 - Q = 100 + 2Q

Simplifying and solving for Q, we get:

3Q = 900

Q = 300

So the effective quota is 300 units.

To verify that this is the correct answer, we need to check that it is feasible within the given supply and demand functions.

Substituting Q = 300 into the demand function:

P = 1000 - Q = 1000 - 300 = 700

So at a quantity of 300, the price would be P = 700.

Substituting Q = 300 into the supply function:

P = 100 + 2Q = 100 + 2(300) = 700

So at a quantity of 300, the price would also be P = 700 from the supply side.

Therefore, an effective quota of 300 units is feasible and correctly balances the market.

The Market Demand for Cars Is P = 1000 -