Question

Suppose market demand and supply are given by Qd = 100-2P and Qs =5+3P. The equilibrium price is: A. $15 B. $19 C. $17 D. $20

Answer 1

Answer:

B. $19

Explanation:

The equilibrium price occurs when the quantity demanded equals the quantity supplied.

The demand and supply functions are, respectively:

$Q_d = 100-2P\\Qs_ =5+3P$

When the quantity demanded equals the quantity supplied, the price is:

$Q_d =Q_s\\100-2P=5+3P\\5P = 100-5\\P=\ 19$

The equilibrium price is $19.

Answer 2

Answer:

$19

Explanation:

Demand Equation for equilibrium states that Quantity Demanded = Quantity Supplied. Therefore,

100-2P=5+3P

95=5P

P=19