Answer to Question #170358 in Microeconomics for Tayyaba

Question

The supply curve for sugar is given as Supply: Qs = 1750 + 24P and demand for sugar is given as Demand: Ds = 3270 – 26P; where P is price in SR per kg. What will be the equilibrium price and equilibrium quantity in the free market? 

Answer 1

Market equilibrium occurs when $Q_d=Q_s$:

$$3270-26P_E=1750+24P_E,$$ $$1520=50P_E,$$ $$P_E=SR\ 30.4.$$

Finally, we can find the equilibrium quantity:

$$Q_E=3270- 26\cdot SR\ 30.4 =2479.6.$$