Question

the demand function for a commodity is Qd= 40-0.1 P and the supply function is Qs= -20+0.2P. find the equilibrium price and quantity.​

Answer 1

Answer:

The equilibrium price will be Rs. $200$ and the quantity will be $20$ units

Step-by-step explanation:

Given: The demand function is Qd= $40-0.1$ P and the supply function is Qs= $-20+0.2$P.

To find the equilibrium price and the quantity of the functions provided.

Solution:

At the equilibrium price Qd = Qs

In other words, the demand function will be equal to the supply function.

We can write this as Qd= $40-0.1$ P = $-20+0.2$P

Which can be further simplified as:

$40 + 20 = 0.2$P $+ 0.1$P

$60 = 0.3$ P

P = $200$.

So we are required to substitute the value of P in the equation we will get Q as

Qs= -$20+0.2(200)$.

Qs = $-20 + 40$

Qs = $20$.

So, therefore, the equilibrium price will be Rs.$200$ and the quantity will be $20$ units.

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