Homework Answers
a. Equilibrium occurs when Qd = Qs
=> 60 - 5P = 5P - 10
=> 60 + 10 = 5P + 5P
=> 70 = 10P
=> 70/10 = P
=> P = 7
Therefore, Equilibrium price = 7
Put P=7 in Qs/Qd tp obtain equilibrium quantity
Q = 60 - 5P = 60 - 5*(7) = 60 - 35 = 25
Therefore, equilibrium quantity = 25 units
b. Qd = Qs
=> 240 - 6P = 4P - 120
=> 240 + 120 = 4P + 6P
=> 360 = 10P
=> 360/10 = P
P = 36
Therefore, Equilibrium price = 36
Put P=36 in Qs/Qd tp obtain equilibrium quantity
Q = 240 - 6P = 240 - 6*(36) = 240 - 216 = 24
Therefore, equilibrium quantity = 24 units
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