Monday, December 7, 2015

PRICE IS 10 DOL, QS IS 50 UNITS, AND THE QD IS 100 UNITS. FOR EVERY 1 DOL RISE IN PRICE, QS RISES BY 5 UNITS AND QD FALLS BY 5 UNITSWHAT IS...

I will start by writing in full some terms given in the question in short form.


DOL = dollar ($), QS = quantity offered for supply, and QD = quantity demanded.


Coming to the answers to the question, the table below gives the QS and QD at different prices.


Price in $   QS      QD


10             50      100


11             55       95


12             60       90


13             65       85


14             70       80


15             75       75


16             80       70


17             85       65


From the above table we see that at price of 15 $ both QS and QD are 75 units.


Therefore:


Equilibrium price = 15 $, and equilibrium quantity = 75 units.

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