The demand curve is described by the equation Q = 400-P, and the supply curve is described by the equation Q

The demand curve is described by the equation Q = 400-P, and the supply curve is described by the equation Q = 100 + 2P. Determine: equilibrium price (PE) and equilibrium volume (QE).

Let us find the equilibrium price and equilibrium sales volume by equating supply and demand:

400 – p = 100 + 2p;

3p = 300;

pe = 100 den. units

Find the equilibrium volume by substituting the price into one of the supply or demand equations:

QE = 400 – 100 = 300 units.

Answer: pe = 100 den. units, QE = 300 units.