The demand and supply for a particular commodity are given by the following two equations:

Demand: P = 10 – 0.2Q_d

and

Supply: P = 2 + 0.2Q_s

Where Q_d and Q_s are quantity demanded and quantity supplied, respectively, and P is price.

Using the equilibrium condition Q_s = Q_d, determine equilibrium price and equilibrium quantity.

Equilibrium price = $

Equilibrium quantity =  units

Graph the two equations to substantiate your answer.

Instructions:
1. Use the line tools Q_d and Q_s to draw the demand and supply curves for P = 4 and 8.
2. Use the drop line tool E to identify the equilibrium quantity and price.

Answer rating: 100% (QA)

To determine the equilibrium price and equilibrium quantity using the given demand and supply equations we need to set the quantity demanded Qd equal ... View the full answer