This problem requires some basic algebra. The demand for computers is QD = 15 – 2P, where P is the price of computers. Initially, the supply of computers is QS = P.
a. Find the original equilibrium price and quantity.
b. Suppose the prices of memory chips and motherboards (two important components in computers) rise and as a consequence, the supply curve for computers becomes QS = -3 + P. Find new equilibrium price and quantity.