Question: Using the demand function Q = 8.56 - p - 0.3p s + 0.1Y and supply function Q = 9.6 + 0.5p - 0.2p c

Using the demand function Q = 8.56 - p - 0.3p_s + 0.1Y and supply function Q = 9.6 + 0.5p - 0.2p_c, determine the amount of any excess demand or excess supply at a price of $4 and explain the mechanism that would cause the equilibrium price to be reached.

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At a price of 4 the demand function yields a quantity of 7 96 Q 8 56 4 0 3 ps 0 1 Y and the supply ... View full answer

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