Suppose quantity demanded is given by Q^d=100-P, and quantity supplied is given by Q^s=20+3P. In this case, equilibrium price, P^*, and equilibrium quantity, Q^*, are as follows:

Question

Quizplus · Accepted Answer

In equilibrium, price adjusts to equate quantity supplied and quantity demanded. Setting Q^s = Q^d, we have 100 - P^* = 20 + 3P^*. Solving this equation for P^*, we find that 80 = 4P^*, so P^* = 20. Plugging P^* back into either Q^s or Q^d, we find that Q^* = 80.

Suppose Quantity Demanded Is Given by Qd=100-P, and Quantity Supplied

Suppose Quantity Demanded Is Given by Q^d=100-P, and Quantity Supplied