If the demand and supply curves are described by the following equations P = a - bQ and P = c + dQ, respectively, the equilibrium price is P* = (ad + bc) / (b + d).

Question

Quizplus · Accepted Answer

To find the equilibrium price, set the demand equation equal to the supply equation: a - bQ = c + dQ. Solving for Q gives Q* = (a - c) / (b + d). Substituting Q* back into either the demand or supply equation gives the equilibrium price P* = (ad + bc) / (b + d).

If the Demand and Supply Curves Are Described by the Following