Question

. Suppose the demand and supply curves of wheat are given by
qP=200-P and qs=120+P
a) Find the equilibrium price
b) Find the equilibrium quantity of demand and supply
c) Find the quantity of demand and supply when P is greater than equilibrium price
d) Find the quantity of demand and supply when P is lesser than equilibrium price.​

Answer 1

Given,

Q(d) = 200-p

Q(s) = 120+p

To find,

a) The equilibrium price

b) The equilibrium quantity of demand and supply

c) The quantity of demand and supply when p is greater than the equilibrium price

d) The quantity of demand and supply when P is lesser than the equilibrium price.​

Solution,

We can solve this numerical problem by using the following process.

Now,

a) Equilibrium price is the price when the market demand is equal to the market supply.

⇒ Market demand = Market supply

⇒ Q(d) = Q(s)

⇒ 200 - p = 120 + p

⇒ 2p = ₹80

⇒ p = ₹40

Thus, the equilibrium price is ₹40.

b) Equilibrium demand = 200-p

                                      = 200 - 40

                                      = 160

Equilibrium supply = 120+p

                               = 120 + 40

                               = 160

c) If the price is greater than the equilibrium price, the equilibrium demand will be less than 160, and the equilibrium supply will be greater than 160.

d) If the price is lesser than the equilibrium price, the equilibrium demand will be greater than 160, and the equilibrium supply will be lesser than 160.

Answer 2

Answer:

qP=200-P and qs=120+P

a) Find the equilibrium price

b) Find the equilibrium quantity of demand and supply

c) Find the quantity of demand and supply when P is greater than equilibrium price

d) Find the quantity of demand and supply when P is lesser than equilibrium price.​

Explanation: