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Qs = 100 + 3PQd = 400 – 2Pwhere Qs is the quantity supplied Qd is the quantity...

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anniepalmer | Student, Undergraduate | eNoter

Posted February 14, 2013 at 5:52 PM via web

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Qs = 100 + 3P
Qd = 400 – 2P
where Qs is the quantity supplied Qd is the quantity demanded & P is price Compute equilibrium price & quantity

This question is based on demand & supply

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justaguide | College Teacher | (Level 2) Distinguished Educator

Posted February 15, 2013 at 6:10 AM (Answer #1)

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The quantity supplied in terms of the price (P) is Q_s = 100 + 3*P and the quantity demanded is Q_d = 400 - 2*P. At equilibrium, the quantity demanded is equal to the quantity supplied. The price at which the two quantities are at equilibrium is given by solving : Q_s = Q_d

=> 100 + 3P = 400 - 2P

=> 300 - 5P

=> P = 60

At P = 60, Q_s = 100 + 180 = 280 and Q_d = 400 - 120 = 280.

The equilibrium quantity is 280 and the equilibrium price is 60

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