Suppose that the market for corn is initially in equilibrium and is perfectly competitive. The demand curve can be expressed as $P = 10 - Q ^ { d }$ ; the supply curve can be expressed as $P = 0.25 Q ^ { s }$ . Quantity is expressed in millions of bushels. What is the equilibrium quantity traded and price in this market?
A) Q = 8; P = 2
B) Q = 2; P = 8
C) Q = 7; P = 3
D) Q = 3; P = 7

Question

Quizplus · Accepted Answer

The equilibrium quantity is found by setting the demand and supply curves equal to each other:$$10 - Q ^ { d } = 0.25 Q ^ { s }$$$$10 - Q ^ { d } = 0.25 Q ^ { d }$$$$10.25 Q ^ { d } = 10$$$$Q ^ { d } = 0.98$$The equilibrium price is then found by plugging the equilibrium quantity into either the demand or supply curve:$$P = 10 - Q ^ { d }$$$$P = 10 - 0.98$$$$P = 9.02$$Therefore, the equilibrium quantity traded is 0.98 million bushels and the equilibrium price is $9.02.

Suppose That the Market for Corn Is Initially in Equilibrium P=10−QdP = 10 - Q ^ { d }P=10−Qd

Suppose That the Market for Corn Is Initially in Equilibrium $P = 10 - Q ^ { d }$