Answer to Question #263307 in Economics for shinigami

Question

Given the demand and supply equations: (2.5)

Qdx= 150- 20Px and Qsx= -30 + 50Px

Find

a) Equilibrium Price

b) B) if market price is Rs. 3.50, what will be the amount of surplus

units?

Answer 1

$Qd=Qs$

$150-20P=-30+50P$

$P=2\frac{4}{7}$ Equilibrium price $Q=98\frac{5}{7}$

b) $(3.5-2\frac{4}{7})*98\frac{5}{7}=95\frac{4.5}{7}$