Answer to Question #228555 in Microeconomics for Mukelisiwe

Question

Suppose the market demand and supply are described by the following information: Q = 200 - 2P + 4i and Q = - 50 + 3P (5)

Determine the equilibrium price and quantity of the above market when i=50.

b)

Plot a graph showing the above results. 

Answer 1

$Q_D = 200 - 2P +(4*50)$

$Q_D = 400 -2P$

$400 -2P = 3P-50 | - 400 -3P$

$-5P = -450 | Div -5$

$E_P = 90$

$E_Q = 3*90-50=220$

The market price is 90 and quantity is 220