Fuel costs have risen quickly during recent years as consumption, refining and production costs have risen sharply Supply and demand conditions in the perfectly competitive domestic crude oil market are Q S 275 2P (Supply) Q D 280 8P (Demand) where Q is quantity in millions of barrels per day, and P is the price per barrel Find the market equilibrium price Note To be at equilibrium, Q S must equal Q D

Question: Fuel costs have risen quickly during recent years as consumption, refining and production costs have risen sharply. Supply and demand conditions in the perfectly competitive

Fuel costs have risen quickly during recent years as consumption, refining and production costs have risen sharply. Supply and demand conditions in the perfectly competitive domestic crude oil market are:

Q_S	= -275 + 2P	(Supply)

Q_D	= 280 - 8P	(Demand)

where Q is quantity in millions of barrels per day, and P is the price per barrel.

Find the market equilibrium price.

Note: To be at equilibrium, Q_S must equal Q_D

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