Market demand is given as Qd = 120 - 2P.Market supply is given as Qs = 2P + 40.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

Question

Quizplus · Accepted Answer

To find the equilibrium price and quantity, we need to set the market demand equal to the market supply:

120 - 2P = 2P + 40

Simplifying, we get:

4P = 80

P = 20

Now that we know the price, we can find the quantity traded by plugging P back into the demand or supply equation:

Qd = 120 - 2(20) = 80

Qs = 2(20) + 40 = 80

Therefore, the equilibrium price is $20 and the equilibrium quantity is 80. The correct answer is choice C.

Market Demand Is Given as Qd = 120 - 2P