Question

Consider the fictitious good derp. the demand for derp is q = 1200 – 2p. suppose the supply of derp is given by q = –600 +2p. what is the equilibrium price of derp? what is the equilibrium quantity of derp? what is the price elasticity of demand at the equilibrium price and quantity? what is the price elas

Answer 1

Given,
q = 1200 - 2p
=> 2p + q = 1200 -----------------(i)
and,
q = - 600 + 2p
=> 2p - q = 600 -------------------(ii)

Now, (i) - (ii), we get,
2p + q - 2p + q = 1200 - 600
=> 2q = 600
=> q = 600/2
•°• q = 300
Putring the value of 'q' in Equation (i)

2p + 300 = 1200
=> 2p = 1200 - 300
=> p = 900/2
•°• p = 450
Ans : 450 and 300