Question #315821


Use the following information to answer questions 1.2 to 1.4:

Suppose the demand for a product can be represented by Qd = 100 – 5P, while

the supply is given by the equation Qs = –12 + 3P, where price is in rand. Determine the equilibrium price and quantity


1
Expert's answer
2022-03-22T19:06:40-0400

At equilibrium, demand equals supply,

Therefore, at equilibrium

Qd=QsQd=Qs

1005P=12+3P100-5P=-12+3P

100+12=5P+3P100+12 = 5P+3P

112=8P112=8P

Therefore, equilibrium price

=14 Rands.

Qd=1005(14)=30Qd=100-5(14) = 30

Qs=12+3(14)=30Qs=-12+3(14)=30

Therefore, the equilibrium quantity is 30.


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

PAMELA
23.03.22, 12:25

Your feedback was so helpful,thank you very much.

LATEST TUTORIALS
APPROVED BY CLIENTS