Market demand is given as Qd = 100 - 2P.Market supply is given as Qs = P + 10.In a perfectly competitive equilibrium, what will be price and quantity traded in the market?
A) Price will be $40, and quantity will be 30.
B) Price will be $35 and quantity will be 30.
C) Price will be $30, and quantity will be 40.
D) Price will be $25, and quantity will be 50.

Question

Market demand is given as Qd = 100 - 2P.Market supply is given as Qs = P + 10.In a perfectly competitive equilibrium, what will be price and quantity traded in the market?  
A) Price will be $40, and quantity will be 30. 
B) Price will be $35 and quantity will be 30. 
C) Price will be $30, and quantity will be 40. 
D) Price will be $25, and quantity will be 50.

Quizplus · Accepted Answer

In a perfectly competitive market, equilibrium occurs where quantity demanded equals quantity supplied (Qd = Qs). Substituting the given equations, we get 100 - 2P = P + 10. Solving for P, we find P = $30. Substituting P = $30 into either the demand or supply equation, we find the quantity traded is 40.

Market Demand Is Given as Qd = 100 - 2P