Question

A market is described by the following supply and demand curves:

QS = 2P

QD = 300 – P

a. Solve for the equilibrium price and quantity.

Answer 1

To find the equilibrium price and quantity, set the supply equation QS = 2P equal to the demand equation QD = 300 - P, and solve for P. The equilibrium price is $100, and by substituting this price into either equation, we find the equilibrium quantity is 200 units.

Step-by-step explanation:

The student is interested in finding the equilibrium price and quantity in a market with the given demand and supply curves, QS = 2P and QD = 300 - P. To find the equilibrium, set the supply equal to the demand: QS = QD. Therefore, we have:

1. 2P = 300 - P
2. 2P + P = 300
3. 3P = 300
4. P = 300 / 3
5. P = 100

Now, to find the equilibrium quantity, substitute P into any of the original equations:

1. QS = 2P
2. QS = 2(100)
3. QS = 200

Thus, the equilibrium price is $100 and the equilibrium quantity is 200 units.