Answer to Question #260844 in Microeconomics for Sohail Ahmed

Question

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Q. The demand for dog treats is represented by the following equation.

QD =300-50P Qs = - 100 + 150P

Determine equilibrium Quantity Demand, Quantity Supply and Price.

Answer 1

Solution:

At equilibrium: Q_D = Q_S

300 – 50P = -100 + 150P

300 + 100 = 150P + 50P

400 = 200P

P = 2

Equilibrium price = 2

Substitute in the demand or supply function to derive equilibrium quantity:

Q_D = 300 – 50P = 300 – 50(2) = 300 – 100 = 200

Q_S = -100 + 150P = -100 + 150(2) = -100 + 300 = 200

Equilibrium quantity = 200