Question: The demand curve for a product is given by q = 120,000 500p and the supply curve is given by q = 1000p for

The demand curve for a product is given by q = 120,000 − 500p and the supply curve is given by q = 1000p for 0 ≤ q ≤ 120,000, where price is in dollars.

(a) At a price of $100, what quantity are consumers willing to buy and what quantity are producers willing to supply? Will the market push prices up or down?

(b) Find the equilibrium price and quantity. Does your answer to part (a) support the observation that market forces tend to push prices closer to the equilibrium price?

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a The quantity demanded at a price of 100 is q 120000 500100 70000 ... View full answer

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