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Assume that demand for a commodity is represented by the equation P = 10 − .2Qd and supply by the equation P = 2 + .2Qs, where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is price. Using the equilibrium condition Qs = Qd, solve the equations to determine equilibrium price. Now determine equilibrium quantity.

Respuesta :

Answer:

6

20

Explanation:

P = 10 − .2Qd

Make Qd the subject of the formula:

Qd = 50 - 5P

P = 2 + .2Qs

Make Qs the subject of the formula:

5P - 10 = Qs

At equilibrium, Qs = Qd

5P - 10 = 50 - 5P

Collect like terms

10P = 60

P = 6

Put the value of P into any equation

Qd = 50 - 5(6)

Qd = 20

I hope my answer helps you

abiolataiwo2015

Based on the information given the equilibrium price is $6 and the equilibrium quantity is 20.

Demand=P = 10 − .2Qd

Supply= P = 2 + .2Qs

Equilibrium price=P

Equilibrium quantity=Qd

Hence:

0.2Qd=10-P

Qd = 50 - 5P

P = 2 + .2Qs

5P - 10 = Qs

Equilibrium, Qs = Qd

5P - 10 = 50 - 5P

Collect like terms

10P = 60

Divide both side by P

P=60/10

P =$6

Quantity demanded  

Qd  = 50 - 5(6)

Qd=50-30

Qd = 20

Inconclusion the equilibrium price is $6 and the equilibrium quantity is 20.

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