Answer to Question #187755 in Economics for Rimsha

Question

(a)A manufacturing market is initially in equilibrium at Equilibrium Price and

Equilibrium Quantity. Suddenly, the demand for its products increases by

10% while the supply of its products decreases by 15%. Find out its new

equilibrium point, equilibrium price and equilibrium quantity.

Answer 1

$$Q_D=a-bp$$

$$Q_S=c+dp$$

$$Q_D^/=1.1Q_D=1.1a-1.1bp$$

$$Q_S^/=0.85c+0.85dp$$

$$p=\frac{1.1a-0.85c}{0.85d+1.1b}$$