Question

consider the following equation Qd=31-3P and Qs=6+2P, if price=7, calculate the ecess . is it a shortage or surplus?​

Answer 1

Answer:

There is an excess of product or surplus amount which is equal to 10

Explanation:

Quantity on demand= 31-3×price

where price=7

Therefore quantity on demand Qd =31-3×7

                                                       =31-21

                                                         =10

Quantity supplied= 6+ 2×price

                            =6+2×7

                              =20

As quantity supplied is greater than quantity on demand there is a surplus of product formed= Quantity supplied- Quantity on demand

                              = 20-10

                               =10

There is an excess of product or surplus amount which is equal to 10

Answer 2

Quantity of supply is higher then Quantity of demand

Explanation:

Given:

Qd = 31-3P

Qs = 6+2P

Price (P) = 7

Computation:

Qd = 31-3P

Qd = 31-3(7)

Qd = 31-21

Qd = 10

Qs = 6+2P

Qs = 6+2(7)

Qs = 6+14

Qs = 20

QS - QD = 10

Quantity of supply is higher then Quantity of demand