Market demand is given as Qd = 75 - P. Market supply is given as Qs = 3P + 15. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Question

Quizplus · Accepted Answer

In a perfectly competitive equilibrium, market demand must equal market supply. Therefore, we set Qd = Qs and solve for P and Q.

75 - P = 3P + 15

60 = 4P

P = $15

Substituting P = $15 into either the demand or supply equation, we can solve for Q:

Qd = 75 - 15 = 60

Qs = 3(15) + 15 = 60

Thus, the price will be $15 and the quantity traded in the market will be 60.

Market Demand Is Given as Qd = 75 - P