Question: Suppose a certain commodity has linear demand and supply functions goings through the following points (i) When P= Sh 7500, q= 1000 units P=

Suppose a certain commodity has linear demand and supply functions goings through the following points (i) When P= Sh 7500, q= 1000 units P=

Suppose a certain commodity has linear demand and supply functions goings through the following points (i) When P= Sh 7500, q= 1000 units P= Sh 4625, q= 750 units (ii) When P= Sh 2525, q= 100 units P=Sh 1525, q=200 units (a) Obtain the linear functions that go through the points given in (i) and (ii) above and clearly explain which the supply is and which the demand function is. Assume this is a normal commodity. (b) Explain what is meant by market equilibrium and obtain the same for the above. Indicate your results on a graphical sketch.

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