Question

Given the demand and supply equations,

Qdx = 150 - 20Px and Qsx=-30+50Px, Find a) Equilibrium price; b) if market price is Rs3.50, what will be amount of surplus units?

Plz i want a proper solution 🙏

Answer 1

a) In equilibrium Qd = Qs, so:

$150 - 20Px = -30 + 50Px,$

70Px = 180,

Px = 2.57.

b) If market price is Rs 3.50, then the amount of surplus units is:

$Qs - Qd = (-30 + 50×3.5) - (150 - 20×3.5) = 65.$