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InterviewSolution
| 1. |
Given the demand for a product as Qd = 100 – 5p and the supply as Qs = -20 + 3p, you are told equilibrium is obtained at the point where Qd = Qs. The equilibrium price for the product is |
| Answer» Q = 25Explanation:At equilibrium: Quantity demanded (QD) = Quantity supplied (QS)Quantity demanded = 100 – 5pQuantity supplied = -20 + 3pTherefore:100 – 5p = -20 + 3p100 + 20 = 3p + 5p120 = 8pEquilibrium price (p) = 15Substitute in the demand or supply function to derive equilibrium quantity:100 – 5p100 – 5(15) = 100 – 75 = 25Equilibrium quantity of the product (q)= 25 | |