Answer to Question #200862 in Microeconomics for Mavis

Question

Suppose the demand and supply for good x are functions p=6.25-1/8Qd and p=1.75+1/10Qs what is the equilibrium price and quantity

Answer 1

At equilibrium {quantity demands = quantity supplied }

That's ${Qd=Qs}$

$p=6.25-\frac{1}{8}Qd$

$-\frac{1}{8}Qd=p-6.25$

$Qd= -8p+50.....….................(1)$

$p= 1.75+\frac{1}{10}Qs$

$\frac{1}{10}Qs=p-1.75$

$Qs=10p-17.5...............................(2)$

$Qs=Qd$

$-8p+50=10p-17.5$

$18p=67.9$

$p(equilibrium$ $price)= 3.75$

$Equilibrium$ $quantity =10(3.75)-17.5=20$