Question 10 Suppose the demand for organic bananas is given by the following equation: Qd =...

Question

Question

Answer 1

Answer #1

A market reaches equilibrium when the quantity demanded equals the quantity supplied.

Quantity demanded is given as

Q_d = 9 - 2P

Quantity supplied is given as

Q_s = 3 + 2P

Equating these two equations

Q_d = Q_s

9 - 2P = 3 + 2 P

Equilibrium price P = $ 1.50

Substituting the value of equilibrium price in the demand equation

Equilibrium quantity Q_d = 9 - 2 $\times$ $ 1.50

Equilibrium quantity Q_d = 6 units

Equilibrium market quantity of organic bananas = 6.00

Answer 2

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