Question

1) A is a small country that produces and consumes Coffee beans. The world price of Coffee beans is $1 per bag, and A's domestic demand and supply for Coffee beans are governed by the following equations: Demand: QD = 8 -P ; Supply: QS = P, where P is in dollars per bag and Q is in bags of Coffee beans.

Answer 1

$Q_d=8-p,$

$Q_s=p,$

$Q_d=Q_s,$

$8-p=p,$

$p=4,$

$Q_d=Q_s=4.$