Answer to Question #266768 in Economics for Samy

Question

Based on the chili market conditions in the Sunday Market, the demand curve and the curve

Chili offers are as follows:

Chili Demand Curve Qd = 16 – P

Chili Supply Curve Qs =P + 2

Define:

a. Equilibrium price (Pe) and Equilibrium Quantity (Qe) of chili sold

b. Describe the condition of the chili market at Pasar Minggu based on the results of questions a)

c. If the government sets a maximum price of 4 (four) what is the excess demand? Describe the condition of the chili market in the Sunday market based on the results of questions from a) and b)

Answer 1

a.

$$16-p=p+2$$

$$p=7$$

$$Q=9$$

b, Euilibrium

c. If p=4

$$Q_d=12$$

$$Q_s=6$$

$$Q_d>Q_s$$

deficit