Answer to Question #104401 in Macroeconomics for Nhlamulo

Question

Calculate the market equilibrium if the equation for a market demand curve is Qd = 100 - 0,5P and the equation for market supply curve is Qs = -20 + P.

Answer 1

In equilibrium, Q_d = Q_s

or, 100 - 0,5P = -20 + P

120=1,5P

or, P = 80

So, Equilibrium quantity , Q = Qd = Qs = 100 - 0,5х80 = 60 [аs, P = 80 unit.]

Answer: Equilibrium price is 80 unit and quantity is 60 unit.