Question

(1). Consider the market for ponche, a alcoholic wine. the demand is characterized by the following equation. Pd = 100-Qd the supply is given by Ps = 0.25Qs

I). determine the equilibrium quantity and price

Answer 1

$pd=ps$

$100-Q=0.25Q$

$100-Q+Q=0.25Q+Q$

$100=1.25Q$

$100/1.25=1.25Q/1.25$

$Q=80$

P=$100-80$

P=$20$