Introduction to Economics - Question 1
The equation for demand and supply functions are given as:
QD= 100 - 5P
QS= 5P
The market equilibrium price and quantity of widget corn can be determined by equating the demand and supply functions-
100 - 5P = 5P
10P = 100
P = 10
Q = 5*10 = 50
The market equilibrium price is $10 and the equilibrium quantity is 50 units.
Consumer surplus can be calculated as the area of t…
Answer 1
a. Demand Equation:
P = 200 – 0.4Qd
Supply Equation:
P = 20 + 0.5Qs
In order to find equilibrium point:
200 – 0.4Q=20 + 0.5Q
200-20=0.4Q+0.5Q
180=0.9Q
180/0.9= Q
200=Q
In order to find the equilibrium price:
P= 200 – 0.4(200)
P=200-80
P=120
So, equilibrium price is equivalent to 120 and equilibrium quantity is equivalent to 200 of apricots.
b.
To determine where the dem…
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