Question

Suppose market demand is QD=50-2P and market supply is QS=40+2P. The market equilibrium price is ​$___________ nothing and the equilibrium quantity is _______units. ​(Enter your responses rounded to two decimal​ places.) Suppose the government institutes a price floor of ​$5.00. The price floor will results in a ▼ surplus shortage of nothing units. ​(Enter your response as a whole​ number.)

Answer 1

The market equilibrium price is ​$ 2.50 and the equilibrium quantity is 45 units.

IF price floor is set at $5 then it will be a surplus of quantity.

Step-by-step explanation:

`\left \{ {{QD=50-2P} \atop {QS=40+2P}} \right.`

50 - 2P = 40+2P

50-40 = 2P + 2P

10 = 4P

10/4 = P

2.5= P

50-2*2.5 = 50- 5 = Q45

If P = 5

40 + 2P = 40 + 2*5 = 50 supply quantity

50 - 2*5 = 50 - 10 = 40 demand quantity

supply will be greater than demand, it will be a surplus