Question

Given the demand for a product as Qd = 100 - 5P and the supply is given as Qs = -20 + 3p. You are told equilibrium is obtained at the point where Qd = Qs. The equilibrium price for the product is

Answer 1

Equilibrium price and output

Equilibrium = Quantity Demanded (Qd) = Quantity Supplied (Qs)

Equilibrium price

$(Qd = 100-5P) = (Qs = -20 + 3P)$

$3P + 5P = 100 + 20$

$8P = 120$

$P= 120/8$

$P = 15$