(i) Calculate the equilibrium price and quantity for the demand and supply curves of a particular commodity given by Qd=10-p and Qs=p
(ii) What will happen when the market price is Rs. 7?
(iii) What will happen when the market price is Rs. 3?

Open in App

Solution

(i) At the equilibrium price Qd=Qs
$∴ 10 - p = p$
$\Rightarrow 2 p = 10$
$\Rightarrow p = 5$
Equilibrium price = Rs. 5
Equilibrium quantity = 10-5
=5 (Demand-side)
(ii) Market price is Rs. 7 and the equilibrium price is Rs. 5. It means that the market price is more than the equilibrium price. In this case, there will be excess supply.
(iii) Market price is Rs. 3 and the equilibrium price is Rs. 5. It means that the market price is less than the equilibrium price. In this case, there will be excess demand.

Suggest Corrections

Similar questions

The market for audio cassettes has inverse supply and demand curves given by P=2Qs and P= 42 -Qd. Calculate the equilibrium price.

Suppose the demand and supply curve of commodity X in a perfectly competitive market are given by:

q^D = 700 − p

q^S = 500 + 3p for p ≥ 15

= 0 for 0 ≤ p <15

Assume that the market consists of identical firms. Identify the reason behind the market supply of commodity X being zero at any price less than Rs 15. What will be the equilibrium price for this commodity? At equilibrium, what quantity of X will be produced?

Suppose the value of demand and supply curves of a Commodity-X is given by the following two equations simultaneously:

Qd = 200 –10p Qs = 50 + 15p

i) Find the equilibrium price and equilibrium quantity of commodity X.

ii) Suppose that the price of a factor inputs used in producing the commodity has changed, resulting in the new supply curve given by the equation

Qs’ = 100 + 15p

Analyse the new equilibrium price and new equilibrium quantity as against the original equilibrium price and equilibrium quantity.

Suppose the demand and supply curves of a Commodity-X is given by the following two equations simultaneously:

Qd = 200 - p

Qs = 50 + 1p i

Find the equilibrium price and equilibrium quantity.

ii) Suppose that the price of a factor of production producing the commodity has changed, resulting in the new supply curve given by the equation

Qs’ = 80 +2p

Analyse the new equilibrium price and new equilibrium quantity as against the original equilibrium price and equilibrium quantity.

Suppose the demand and supply curves of a commodity are given as:
$Y^{d} = 200 - p$
$Y^{s} = 120 + p$
(i) Find the equilibrium price and equilibrium quantity.
(ii) Also show that at a price of Rs. 30, there is excess demand and at a price of Rs. 45, there is excess supply.

Join BYJU'S Learning Program

(i) Calculate the equilibrium price and quantity for the demand and supply curves of a particular commodity given by Qd=10-p and Qs=p (ii) What will happen when the market price is Rs. 7? (iii) What will happen when the market price is Rs. 3?

(i) Calculate the equilibrium price and quantity for the demand and supply curves of a particular commodity given by Qd=10-p and Qs=p
(ii) What will happen when the market price is Rs. 7?
(iii) What will happen when the market price is Rs. 3?