Suppose the demand and supply curves of a commodity 'X' in a perfectly competitive market are given by:
Qd = 700 - p
Qs = 500 + 3p, for p $\geq$ 15
= 0, for 0 < p < 15
Find the equilibrium price and equilibrium quantity.

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Solution

At equilibrium price, Qd = Qs
Hence, 700 - p = 500 + 3p
$\Rightarrow 4 p = 200 \Rightarrow p = 50$
Hence, equilibrium quantity = 700 - 50 = 650 (Demand side)
or Equilibrium quantity = $500 + 3 \times 50 = 650$ (supply side)

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Suppose the demand and supply curves of a commodity 'X' in a perfectly competitive market are given by: Qd = 700 - p Qs = 500 + 3p, for p ≥ 15 = 0, for 0 < p < 15 Find the equilibrium price and equilibrium quantity.

At equilibrium price, Qd = Qs Hence, 700 - p = 500 + 3p ⇒4p=200⇒p=50 Hence, equilibrium quantity = 700 - 50 = 650 (Demand side) or Equilibrium quantity = 500+3×50=650 (supply side)

Suppose the demand and supply curves of a commodity 'X' in a perfectly competitive market are given by:
Qd = 700 - p
Qs = 500 + 3p, for p $\geq$ 15
= 0, for 0 < p < 15
Find the equilibrium price and equilibrium quantity.

At equilibrium price, Qd = Qs
Hence, 700 - p = 500 + 3p
$\Rightarrow 4 p = 200 \Rightarrow p = 50$
Hence, equilibrium quantity = 700 - 50 = 650 (Demand side)
or Equilibrium quantity = $500 + 3 \times 50 = 650$ (supply side)