Question

The demand and supply equations in a competitive market are as follows:
P=1080-29
P=180+8Q
What is the equilibrium price?
Answer Choices:
a. 700
b. 800
c. 900
d. 775
​

Answer 1

Answer:

The equilibrium price is $900$

Explanation:

I think it might be  $P= 1080-2Q$

So, at the point of equilibrium, demand is equal to supply in a perfectly competitive market.

so,

$Qd= 1080-2P\\Qs=180+8P\\Qd=Qs\\1080-2P=180+8P\\1080-180= 8P+2P\\900=10P\\Pe = 900/10\\Pe= 90\\\\Qe= 1080-2(90)\\=1080-180\\=900$

The equilibrium price is equal to $90$ and the equilibrium quantity is equal to $900$