Question

MacGuffins have a demand function of QD = 70 – P and a supply function of QS = 2P + 10. Determine the price at equilibrium
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Answer 1

Answer: 20

Explanation:

For us to calculate the equilibrium price, we must equate the quantity demanded with the quantity supplied. In this case, Qd = Qs where,

QD = 70 – P

QS = 2P + 10.

QD = QS

70 - P = 2P + 10

70 - 10 = 2P + P

60 = 3P

P = 60/3

P = 20

The equilibrium price is 20