Suppose the demand function for a good is given as Qd=90 - 3 P and the supply function is given as Qs= 30 + 7P . If find the equilibrium quantity for the good also using a diagram explain for what price there will be an excess supply and excess demand for this good in the market.
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To determine the equilibrium price, do the following.
Set quantity demanded equal to quantity supplied:
Add 50P to both sides of the equation. You get.
Add 100 to both sides of the equation. You get.
Divide both sides of the equation by 200. You get P equals $2.00 per box. This is the equilibrium price.
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