Refer to the demand and supply equations. What are the equilibrium pri

Refer to the demand and supply equations. What are the equilibrium price and quantity?

What will be an ideal response?

ANSWER

Bring similar terms on each side of the equation and solve for equilibrium price and quantity — quantities which make the amount supplied equal to demanded.

2P + 4 P = 80 + 10; therefore, equilibrium P = 90/6 = 15. To confirm that it is the equilibrium price, substitute 15 in the above equations for P.

At 15 P, Qd = 80 – 2 (15 ) = 50 and Qs = – 10 + 4 (15 ) = 50; thus the equilibrium quantity equals 50 units.