Question

Find the equilibrium price and equilibrium quantity for the following functions.
Demand: x = 100 – 2p and supply: x = 3p – 50.

Answer 1

Demand x = 100 – 2p

Supply x = 3p – 50

At equilibrium, demand = supply

100 – 2p = 3p – 50

- 2p – 3p = -100 – 50

- 5p = -150

p = `(-150)/(-5) = 30`

∴ Equilibrium price p_E = 30

Supply, x = 3p – 50

Put p = 30, we get

x = 3(30) – 50 = 90 – 50 = 40

∴ Equilibrium quantity x_E = 40