Question: Suppose an inverse demand function is given by p = 1 0 qd and an inverse supply function is given by p

Suppose an inverse demand function is given by p = 10  qd and an inverse supply function is given by p = 4 + 2qs.

(a) What is the equilibrium price and quantity combination? [5]

(b) What happens when the price is above or below the equilibrium price? [5]

 

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