Question

Consider a market with 1,000 identical consumers with the following individual demand function p = 3 − qd and 1,000 identical sellers with the following individual supply function p = qs −1
. a) Obtain the market demand and supply functions and represent them graphically. b) Find the equilibrium price and quantity.Consider a market with 1,000 identical consumers with the following individual demand function p = 3 − qd and 1,000 identical sellers with the following individual supply function p = qs −1
. a) Obtain the market demand and supply functions and represent them graphically. b) Find the equilibrium price and quantity.

Answer 1

$d=\frac{3-p}{q}$

$s=\frac{p+1}{q}$

d=s

$\frac{3-p}{q}$ =$\frac{p+1}{q}$

$\frac{-2p+2}{q}=0$

p=1

q=2

d=1

s=1