Question

cigarettes are forbidden, so people trade cigarettes in a black market. The 

cigarette demand is 𝑄𝐷 = 12 − 𝑝, and cigarette supply is 𝑄𝑆 = 2𝑝.

Answer 1

From the given information, equilibrium price and equilibrium quantity can be calculated.

At equilibrium, $Q_d=Q_s$

$12-P=2P$

$3P=12$

$equilibrium \space price P=4$

$equilibrium\space quantity\space Q=12-4=8$