Question

1. Consider a competitive market with a demand curve given by P = 90 - 2QD and a supply curve given by P = Qs. (a) Solve for the perfectly competitive market equilibrium price and quantity. Show your work. Draw the demand and supply curves on a graph and label your equi- librium price and quantity.

Answer 1

In this graph, the demand curve is represented by a downward-sloping line starting at 90 on the vertical axis and intersecting the horizontal axis at Q = 0. The supply curve is represented by an upward-sloping line starting at the origin (0,0). The equilibrium point occurs at the intersection of these two curves, with P = 30 and Q = 30.

Step-by-step explanation: