Market demand is given as Qd = 250 - .5P. Market supply is given as Qs = 2P. What would result if the market price were $50?

Question

Quizplus · Accepted Answer

When the market price is $50, we can calculate how much quantity is demanded and supplied.
Qd = 250 - 0.5P
Qd = 250 - 0.5(50)
Qd = 225
Qs = 2P
Qs = 2(50)
Qs = 100
At a price of $50, the quantity demanded (225) exceeds the quantity supplied (100), resulting in a shortage of 125 units. Therefore, the correct answer is D, a shortage of 125.

Market Demand Is Given as Qd = 250 -