Suppose that the demand and supply curves for a good are given by Q^D = 1,000/P and Q^S = 10P. What is happening in the market at a price of $2?

Name: Suppose that the demand and supply curves for a good are given by Q D = 1,000/P and Q S = 10P. What is happening in the market at a price of $2?
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Question

Quizplus · Accepted Answer

At a price of $2, the quantity demanded Q^D = 1,000/2 = 500 units, and the quantity supplied Q^S = 10*2 = 20 units. Therefore, there is an excess demand of 480 units (500 - 20 = 480).

Suppose That the Demand and Supply Curves for a Good