I need to determine the equilibrium price and quantity using the following equations: Demand: P = 20 -2Qd and Supply: P = -5 + 3Qs. Can someone help me out?"

Expert Answers

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For any product or service in a free market, at equilibrium the quantity demanded is equal to the quantity supplied. You have the equations which provide the relation between quantity demanded or supplied for different prices.

From the demand function P = 20 - 2Qd, we get Qd = (20 - P)/2. From the supply function P = -5 + 3Qs, we get the quantity supplied as Da = (P + 5)/3

At equilibrium Qs = Qd

=> (20 - P)/2 = (P + 5)/3

=> 60 - 3P = 2P + 10

=> 5P = 50

=> P = 10

Substituting P in any of the equations we get the quantity as 5.

The equilibrium price is 10 and the quantity under equilibrium is 5.

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