Answer to Question #285245 in Microeconomics for hello

Question

Q.2  If following are the demand and supply equations for a consumer good:   (20)

        Q^d = 300,000/P (Q^d = quantity demanded)

        Q^s = 30P (Q^s = quantity supplied)

        (P = Price)

 

           Find the market clearing price and the quantity at the equilibrium. Also sketch the demand and supply curves.

Answer 1

At Equilibrium, $Q^d=Q^s$

$\therefore \frac{300000}{P}=30P$

$30P^2=300000$

$P^2=10000$

$P=100$

Therefore, the market clearing Prices is 100

$Q^s= 30\times 100=3000$

$=3000$

Therefore market clearing Quantity is 3000

Sketch