In a market the demand curve is given by P = 100 –2q and supply by P =2q. What are the equilibrium price and quantity traded? Group of answer choicesP* = 25, q* = 25P* = 100, q* = 50P* = 50, q* = 50P* = 50, q* = 25None of the above.
Question
In a market the demand curve is given by P = 100 –2q and supply by P =2q. What are the equilibrium price and quantity traded? Group of answer choicesP* = 25, q* = 25P* = 100, q* = 50P* = 50, q* = 50P* = 50, q* = 25None of the above.
Solution
The equilibrium in a market occurs where the quantity demanded equals the quantity supplied, which is where the demand curve intersects the supply curve.
Step 1: Set the Demand and Supply Equations Equal to Each Other To find the equilibrium, we set the demand equation (P = 100 - 2q) equal to the supply equation (P = 2q):
100 - 2q = 2q
Step 2: Solve for q Solving this equation for q gives us the equilibrium quantity:
4q = 100 q = 25
Step 3: Substitute q into Either the Demand or Supply Equation to Find P Substituting q = 25 into the demand equation P = 100 - 2q gives us the equilibrium price:
P = 100 - 2*25 = 50
So, the equilibrium price is $50 and the equilibrium quantity is 25 units. Therefore, the correct answer is P* = 50, q* = 25.
Similar Questions
In a market there are two consumers. Each consumer has a demand curve of P = 10–0.5q. What is the market demand curve? Group of answer choicesP = 10 – QP = 10 – 0.25QP = 20 – QP = 10 – 2QP = 20 – 0.5Q
1. In a particular market, demand and supply curves are defined by the following equations: P=100– 0.5QD QS= -200 + 2P where, P is the price in pounds, QS is the quantity supplied and QD¬ is the quantity demanded. (a) What is the equilibrium price and quantity? [5 marks] (b) What is the price elasticity of supply at a price of £35? [5 marks]
In a market the demand curve is given by P = 57– 4q and supply by P = 4q. What is CS in the market equilibrium? [Round your answer to 2 decimal places]
The demand and supply functions for different firms are given belowi) Qd = 200 – 2PQs= - 20 + 2Pii) Qd = 51 – 3PQs = -4 +8PDetermine the equilibrium price and equilibrium quantity for each firm
Consider a market with a demand curve of P 198-q and a supply curve of P=4q.What is the price elasticity of supply at the market equilibrium?
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.