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Suppose that the market demand in a perfectly competitive industry is given by, Qd = 7000 – 500 p and the market supply function is given by, Qs = 4000 +250 P. Find the market equilibrium price. |
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Answer» Equilibrium is determined by the condition, Qd = Qs. In this example, 7000-500 p = 4000 +250 p 7000-4000 = 250 p + 500 p 3000 = 750 P \(\therefore P = \frac{3000}{750} = 4\) Therefore, the equilibrium price in the market is ₹ 4. 700 - 500P = 4000 + 250P 7000 - 4000 = 250 P + 500 PP 3000 = 750 P \(\therefore P = \frac{3000}{750} = 4\) |
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