Question

15. The individual demand and supply functions of a product are given as Dx = 10-2Px, Sx =10 + 2Px where Px stands for the price and Dx and Sx respectively stands for quantity demanded and quantity supplied. If there are 4000 consumers and 1000 firms in the market, then equilibrium price will be :

a. Re 4

b. Re 4.25

c. Re 3

d. Re 5

Answer 1

Dear student,
At equilibrium,
Dx = Sx
4000(10-2Px) = 1000(10+2Px)
40000 - 8000Px = 10000 + 2000Px
30000=10000Px
​Px=Rs 3