Answer to Question #205840 in Economics for leraro

Question

Given the demand for a product as Qd = 50 - 8P and the supply is given as Qs = -17,5 + 10P. You are told equilibrium is obtained at the point where Qd = Qs. The equilibrium quantity for the product is

Answer 1

Let's first find the equilibrium price for the product:

$$Q_d=Q_s,$$ $$50 - 8P_E=-17,5 + 10P_E,$$ $$67.5=18P_E,$$ $$P_E=\$3.75.$$

Finally, we can find the equilibrium quantity for the product by substituting the equilibrium price either in the demand or supply function:

$$Q_E=50-\$3.75\cdot8=20.$$