Answer to Question #232892 in Microeconomics for Awliyo

Question

The demand and supply function given as follow Qd= 100-10P and Qs= 10P
A. Find equilibrium price and quantity
B. Determine whether there is surplus or shortage at price equal to 6
C. What is the change in equilibrium price of demand curve change to Qd= 30- 10P, show the change graphically

Answer 1

a)I)Equilibrium price

$100−10p=10p$

$100 = 20P$

$P =\frac{ 100}{20}$

​

$Equilibrium price (P) = 5$

Ii) Equilibrium quantity

$Qd = 100-10p$

$= 100-10(5)$

$= 100-50 = 50$

$Equilibrium quantity = 50$

b) The quantity supplied (QS) = $10P$

$= 10 × 6 = 60$

Indicating that there will be a surplus since it is more than the equilibrium quantity