Question #116419

7.) Assume a linear demand function of the form:

Qd = 120 - 5P

and a linear supply curve of the form:

Qs = -30 + 10P

Using these demand and supply functions, answer the following questions. Once you

have had a go at the questions, follow the link below to compare your answers.

a) Calculate the quantities demanded and supplied for prices from $3 - $15.

b) Plot these figures to give the demand and supply curves for the product.

c) Using simultaneous equations, calculate the equilibrium price and output.

Qd = 120 - 5P

and a linear supply curve of the form:

Qs = -30 + 10P

Using these demand and supply functions, answer the following questions. Once you

have had a go at the questions, follow the link below to compare your answers.

a) Calculate the quantities demanded and supplied for prices from $3 - $15.

b) Plot these figures to give the demand and supply curves for the product.

c) Using simultaneous equations, calculate the equilibrium price and output.

Expert's answer

**Linear demand function**

Qd = 120-5P

**Linear supply curve**

Qs = -30 + 10P

**a)Â Â Â Â Â Quantities demanded and supplied for prices $3 - $15**

**b)Â Â Â Â Â Demand and supply curves**

**c)Â Â Â Â Â Equilibrium price and output**

**Equilibrium = Quantity Demanded (Qd) = Quantity Supplied (Qs)**

**Equilibrium price**

(Qd = 120-5P) = (Qs = -30 + 10P)

1OP + 5P = 120 + 30

15P = 150

P = 150/15 =$**10**

**Equilibrium Quantity (Qd)**

Qd = 120-5P

Qd = 120-5(10)

Qd = 120-50

Qd = **70**

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