The demand is determined by the formula Qd = 600-2p. and the proposal by the formula Qs = 300 + 4p.
| July 24, 2021 | education
The demand is determined by the formula Qd = 600-2p. and the proposal by the formula Qs = 300 + 4p. Determine the equilibrium price and the equilibrium sales volume, if a fixed price of $ 10 is established, what will happen in the market?
Since the equilibrium price p = 10 USD has been established, we substitute this price in the supply and demand formulas.
Qd = 600 – 2 * 10 = 580;
Qs = 300 + 4 * 10 = 340.
Market demand exceeds supply (580> 340). Consequently, there is a shortage of goods on the market.
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