Answer to Question #143956 in Microeconomics for Muieez

Question

Given the following demand and supply function answer the following questions:
​​Qd= 300-20P​​​Qs= -100+20P
a. Find the equilibrium quantity and price and illustrate the same on a graph. Also, explain if it is static or comparative equilibrium.
b. Suppose the price is fixed at Rs. 5, now find if the market is in equilibrium or not? Illustrate it graphically also and explain about the demand and supply.
c. Suppose the price is fixed at Rs. 15, now find if the market is in equilibrium or not? Illustrate it graphically also and explain about the demand and supply.
d. Suppose the good in question is normal explain the effect of increase in the consumer income on the equilibrium. Also, explain if it is static or comparative equilibrium with the reference to your answer in part a.

Answer 1

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