Question

If the supply curve of wheat per kg is defined by QS=1800+240P, and demand curve is defined
by QD=3500-266P. what is market equilibrium price (P)?
b. 336
C. 3.92
d. 4.23​

Answer 1

Answer:

if the supply curve of wheat per kg is defined by QS =1800+240p and demand curve is defined by Q=3500-266p, find price of wheat per in the market a Rs .200.b

Answer 2

Option b is the correct answer.

If the supply curve of wheat per kg is defined by QS=1800+240P, and demand curve is defined by QD=3500-266P then market equilibrium price is 3.36.

Price at market equilibrium is also known as market clearing price.

We can find market equilibrium price as follows:

supply curve - QS=1800+240P

demand curve - QD=3500-266P

At equilibrium level Demand =Supply

Therefore,

QD=QS

⇒3500-266P =1800+240P

⇒3500-1800 = 240P +266P

⇒1700=506 P

⇒P = 1700/506

⇒P= 3.36