assume that demand for a commodity is represented by the equation Qd=185-20p and supply by the equation Qs=85+30p,where Qd and Qs are quantity demanded and supplied,respectively.Using the equilibrium condition Qs=Qd,solve the equation to determine equilibrium price and quantity.Graph the two equations to substantiate your answer
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The demand for the commodity is represented by the equation Qd=185-20p and the supply for the commodity is represented by the equation Qs=85+30p,where Qd and Qs are quantity demanded and supplied, respectively and p is the price. At equilibrium, the condition Qs=Qd holds. This can be used to determine the equilibrium price and quantity.
If Qs = Qd, 185 - 20p = 85 + 30p
or 185 - 85 = 20p + 30p
or 100 = 50p
or p = 2
Substituting the price p = 2 in the equation for Qs = 85 + 30p gives, Qs = 85 + 60 = 145. Substituting p = 2 in the equation Qd = 185 - 20p gives 185 - 20*2 = 185 - 40 = 145.
The equilibrium price is p = 2 and the equilibrium quantity is 145.
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