Market demand is given as Q_D= 120 - 2P.Market supply is given as Q_S= 2P + 40.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

Question

Quizplus · Accepted Answer

To find the equilibrium price and quantity, we need to set the market demand equal to market supply and solve for P and Q.

120 - 2P = 2P + 40

120 - 40 = 2P + 2P

80 = 4P

P = 20

Now that we have the equilibrium price, we can plug it back into either the demand or supply equation to find the equilibrium quantity:

Q = 120 - 2P

Q = 120 - 2(20)

Q = 80

Therefore, the equilibrium price is $20 and the equilibrium quantity is 80.  So, the best choice is C.

Market Demand Is Given as QD = 120 - 2P

Market Demand Is Given as Q_D= 120 - 2P