Suppose demand is given by Q^d = 400 - 15P + I,where Q^d is quantity demanded,P is price and I is income.Supply is given by Q^s = 5P,where Q^s is quantity supplied.When I = 100,equilibrium quantity is A) 15 B) 20 C) 25 D) 30

Question

Quizplus · Accepted Answer

At equilibrium, quantity demanded equals quantity supplied. Setting Q^d = Q^s, we get: 400 - 15P + 100 = 5P Simplifying, 515 = 20P P = 25.75 Since price cannot be a fractional value, we round down to 25. Therefore, equilibrium quantity is Q^d = 400 - 15(25) + 100 = 25 units.

Suppose Demand Is Given by Qd = 400 - 15P

Suppose Demand Is Given by Q^d = 400 - 15P