Answer to Question #312197 in Microeconomics for MZSEL

Question

Using the demand function, 12-P, and the supply function, 9+0.5P, for coffee, 

Determine the equilibrium price and quantity of coffee if Y=$55, ps=0.20, and pc=$5. 

Draw the demand and supply curves and illustrate this equilibrium in a diagram.

Answer 1

12-P=9+0.5P

1.5P= 3

P= 2

Q= 12-2= 10