Answer to Question #297688 in Microeconomics for Girl

Question

A market consists of four individuals A, B, C and D whose demand functions are: -

QA=70-2P

QB=200-4P

QC=20-0.5P

QD=240-4P

If the industry supply equation is given by 𝑄5 =40+3.5𝑃

Compute the equilibrium price and quantity and determine the quantities that will be

purchased by each individual.

Answer 1

Total quantity demanded$=Qa+Qb+Qc+Qd$

$=70-2p+200-4p+20-0.5p+240-4p$

$=530-10.5p$

At equilibrium, total quantity demanded is equal to quantity supplied.

$530-10.5p=40+3.5p$

$530-40=3.5p+10.5p$

$490=14p$

$P=35$

$Q=530-10.5×35=162.5$

Quantity consumed by each individual:

$Qa=70-2p=70-2×35=0Units$

$Qb=200-4p=200-4×35=130Units$

$Qc=20-0.5p=20-0.5×35=2.5Units$

$Qd=240-4p=240-2×35=170units$