Question

Suppose the demand equation for computers by Teetan Ltd for the year 2017 is given by Qd= 1200-P and the supply equation is given by Qs= 120+3P. Find equilibrium price and analyse what would be the excess demand or supply if price changes to Rs 400 and Rs 120.

Answer 1

Qd=Qs

1200-P=120+3P

P=270

P=400

$Qd=1200-400=800$

$Qs=120+3*400=1320$

P=120

$Qd=1200-120=1080$

$Qs=120+3*120=480$