Answer to Question #224413 in Microeconomics for Gurjot

Question

 

1. Suppose that P = 50 - QD and P = QS are the market demand and supply functions for paper. (Please show your calculation and diagram in the space provided. No point will be awarded to answers without proper calculation.) (5’)

1) Show market demand (D) and market supply (S) curves graphically and calculate the market equilibrium. (3’)

Answer 1

$QS=P\\P=50-QD\\QD=50-P\\QD=QS\\50-P=P\\50=P+P\\50=2P\\P=25\\Q=P\\Q=25$