Suppose that initially, the equations for demand and supply are Qd = 48 - 4P and Qs = 4P - 16, respectively.If the quantity supplied increases by 4 at every price (so that the supply curve shifts to the right), the equilibrium price will change from:
A)$8 to $7.50.
B)$8 to$12.2.2.2.
C)$12 to$8.
D)$7.50 to$8.

Question

Quizplus · Accepted Answer

Initially, set Qd = Qs to find the equilibrium price: 48 - 4P = 4P - 16, solving gives P = 8. With the supply shift, the new supply equation is Qs = 4P - 12. Setting the new Qs equal to Qd: 48 - 4P = 4P - 12, solving gives P = 7.50. Thus, the equilibrium price changes from $8 to $7.50.

Suppose That Initially, the Equations for Demand and Supply Are