Market demand is given as Qd = 120 - P. Market supply is given as Qs = 4P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Name: Market demand is given as Qd = 120 - P. Market supply is given as Qs = 4P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?
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Question

Quizplus · Accepted Answer

In equilibrium, Qd = Qs. Setting 120 - P = 4P, we solve for P to get P = $24. Substituting P = $24 into either Qd or Qs gives the quantity as 96.

Market Demand Is Given as Qd = 120 - P