1.

The given demand and supply function are given by D(x) = 20 – 5x and S(x) = 4x + 8 if they are under perfect competition then the equilibrium demand is _______ (a) 40 (b) 41/2(c) 40/3(d) 41/5

Answer»

(c) 40/3

D(x) = S(x) in equilibrium 

20 – 5x = 4x + 8 

9x = 12 

x = 4/3 = x0 

p0 = 20 – 5(4/3)

= 20 - 20/3

= 40/3



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