# Answer to Question #55275 in Finance for Saurabh Mishra

Question #55275

Q2.
A) Determine the market equilibrium price if the demand and supply function is given as
D-12p+8
S-14p-4
Where D-demand
S-supply
P-price
B) Determine the equilibrium quantity if price is the same as above
D-4p-4q
S-8q-4p
Where D-demand
S-supply
P-price
Q-quantity

Expert's answer

a) D = 12p + 8

S = 14p β 4

Equilibrium price is in the point, where Qd = Qs, so:

12p + 8 = 14p - 4

p = $6

b) The equilibrium quantity is in the point, where Qd = Qs, so if p = 6, then:

D = 4p β 4q

S = 8q β 4p

24 - 4q = 8q - 24

q = 4 units.

S = 14p β 4

Equilibrium price is in the point, where Qd = Qs, so:

12p + 8 = 14p - 4

p = $6

b) The equilibrium quantity is in the point, where Qd = Qs, so if p = 6, then:

D = 4p β 4q

S = 8q β 4p

24 - 4q = 8q - 24

q = 4 units.

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