The individual demand and supply functions of a product are given as: Dx = 10 – 2Px, Sx = 20 + 2Px, where Px stands for price and Dx and Sx respectively stands tot quantity demanded and quantity supplied. If there are 4,000 consumers and 1,000 firms in the market, then quantity demanded and supplied at the equilibrium price of 2.
(a) 20,000 (b) 22,000 (c) 21,000 (d) 24,000
Dear student,
The quantity demanded and quantity supplied can be calculated by substituting the given values in the respective equations.
DX = 10 - 2 (2) = 6
As there are 4000 consumers the total demand is (4000 * 6) = 24,000
Similarly,
SX = 20 + 2 (2) = 24
As there are 1000 firms in the market so the total supply is (1000 * 24) = 24,000
The quantity demanded and quantity supplied can be calculated by substituting the given values in the respective equations.
DX = 10 - 2 (2) = 6
As there are 4000 consumers the total demand is (4000 * 6) = 24,000
Similarly,
SX = 20 + 2 (2) = 24
As there are 1000 firms in the market so the total supply is (1000 * 24) = 24,000