Assume that the supply of apricots is QS= 2P - 10 - a, and the demand for apricots is QD=25 - P/3 + b, where a and b are exogenous supply and demand shifters.
Assume that a=0 and b=0.
Compute the equilibrium price and quantity.
Answer
the demand and supply curve while a=0 and b=0 is
Q=2P-10 and Q=25-P/3
equating both as the equilibrium is at Qd=Qs
2P-10=25-P/3
2P+P/3=35
(6P+P)/3=35
7P=105
P=15
Q=2*15-10=20
the price is $15 and the quantity 20 units
Assume that the supply of apricots is QS= 2P - 10 - a, and the demand...
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