The demand curve can be graphed using the expression Q = 100 - P and the supply curve can be graphed using the expression Q = 40 + 2P. Find the equilibrium price and quantity in this market.

The equilibrium price and quantity within a market for a good can be found at the intersection of the supply and demand curves. Therefore, we need to use a mathematical method to find the P and Q by equating the two expressions. 100 - P = 40 + 2P 100 - 40 = 2P + P 60 = 3P P = 20 therefore Q = 100 - 20 = 80 therefore the equilibrium price for this good is 20 at 80 units sold.

TK

Related Economics A Level answers

All answers ▸

I have revised all the content for Economics but my essays are not reaching the top level, what can I do to ensure I get the highest marks?


Explain why deflation may not always be a problem


If the Marginal Social Cost of Producing a good is higher than the marginal private cost -what has happened?


Explain the factors which might determine the natural rate of unemployment (15 Marks)