Question

If you have a demand function of Qd=48-9P and a supply function of Qs=-12+6P,

what would the equilibrium QUANTITY be?

Answer 1

The equilibrium quantity is 26.4

Explanation:

Given

`Q_d = 48 - 9P`

`Q_s = 12 + 6P`

Required

Determine the equilibrium quantity

First, we need to determine the equilibrium by equating Qd to Qs

i.e.

`Q_d = Q_s`

This gives:

`48 -9P = 12 + 6P`

Collect Like Terms

`-9P - 6P = 12 - 48`

`-15P = -36`

Solve for P

`P = (-36)/(-15)`

`P =2.4`

This is the equilibrium price.

Substitute 2.4 for P in any of the quantity functions to give the equilibrium quantity:

`Q_d = 48 - 9P`

`Q_d = 48 - 9 * 2.4`

`Q_d = 26.4`

Hence, the equilibrium quantity is 26.4