Asked by Austin Vaughn on Jul 19, 2024
Verified
(Advanced analysis) Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. Refer to the given information.The equilibrium quantity is:
A) 10.
B) 20.
C) 15.
D) 30.
Demand Equation
A mathematical formula that represents the relationship between the quantity of a good or service demanded and various factors affecting it, such as price and income.
Equilibrium Quantity
The quantity of goods supplied that is exactly equal to the quantity of goods demanded at the market price.
- Gain an understanding of the fundamentals of demand and supply, along with the elements that determine their influence on the equilibrium price and quantity.
- Investigate the repercussions of demand and supply curve modifications with graphical analysis.
Verified Answer
ST
Shawntina Trotter-DanielJul 26, 2024
Final Answer :
B
Explanation :
To find the equilibrium quantity, set the demand equation equal to the supply equation and solve for Q: 10 - 0.2Q = 2 + 0.2Q. Solving this equation gives Q = 20.
Learning Objectives
- Gain an understanding of the fundamentals of demand and supply, along with the elements that determine their influence on the equilibrium price and quantity.
- Investigate the repercussions of demand and supply curve modifications with graphical analysis.