Assume that demand for a commodity is represented by the equation P = 10 .2Qd and

Question:

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. Graph the two equations to substantiate your answers.