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Question
Find the equilibrium price and equilibrium quantity for the following functions.
Demand: x = 100 – 2p and supply: x = 3p – 50.
Solution
Demand x = 100 – 2p
Supply x = 3p – 50
At equilibrium, demand = supply
100 – 2p = 3p – 50
- 2p – 3p = -100 – 50
- 5p = -150
p = `(-150)/(-5) = 30`
∴ Equilibrium price pE = 30
Supply, x = 3p – 50
Put p = 30, we get
x = 3(30) – 50 = 90 – 50 = 40
∴ Equilibrium quantity xE = 40
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