Question

The demand equation for blue jeans in the U.S. is QD = 500 - 7P, and the supply equation for blue jeans is QS = 20 + 3P, where P is the price per pair of blue jeans and QD and QS are in 1,000’s of blue jeans.

(A) How many blue jeans are purchased and at what price do they sell for in the U.S.?

Answer 1

Equilibrium Price = 48

Equilibrium Quantity = 164

Step-by-step explanation:

Market equilibrium at : Market Quantity Demand = Market Quantity Supplied

QD = QS

500 - 7P = 20 + 3P

500 - 20 = 3P + 7P

480 = 10 P

P = 480 / 10

Equilibrium Price = 48

Equilibrium Quantity : Quantity Demanded = Quantity Supplied

Putting value of equilibrium price in QD & QS (equalised), we get :

500 - 7(48) = 20 + 3 (48)

Equilibrium Quantity = 164