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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 – 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 – 4q
S = 8q – 4p
24 - 4q = 8q - 24
q = 4 units.

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