Answer to Question #201732 in Microeconomics for Anathi Tobigunya

Question

If the equation for a market demand curve is Qd = 100 – 0,5P and the equation for a market supply curve is Qs = –20 + P, the market equilibrium quantity is:

Answer 1

Market is in equilibrium when Qd=Qs

$Q_d=Q_s\\100-0.5P=-20+P\\100+20=P+0.5P\\120=1.5P\\P=\frac{120}{1,5}\\P=80$

$Q_d=100-0.5(80)=60\\Q_s=-20+80=60$

Therefore the equilibrium quantity is 60 units