Answer to Question #201398 in Microeconomics for Motsatsi

Question

Use the following functions that show quantity demanded and quantity supplied to answer the question

Qd=600 - 30P

Qs=-300 +120P

If the price is R8, then there will be a surplus of ______ units.

Answer 1

Finding the surplus we have to replace the price into both the supply and demand functions and find the difference between the two.

$Qd=600-30(8)=360$

$Qs= -300+120(8)=660$

$Qs-Qd = 660-360$

$Surplus = 300$