Homework Answers
New supply equation after increase in supply is Qs = -2 + P/10 + 2 or Qs = P/10
Demand equation is unchanged at Qd = 13 - P/40
Find the equilibrium using Qs = Qd
P/10 = 13 - P/40
5P/40 = 13
Or P = 104
Q = 10.4
Hence, the new price is $104 and new quantity is 10.4 billion at the new equilibrium
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