Suppose the market for potatoes can be expressed as follows: Supply: QS = -20 + 10p Demand: QD = 400 - 20p Solve for the equilibrium price and quantity
What will be an ideal response?
Equate the RHS of the supply equation to the RHS of the demand equation: -20 + 10p = 400 - 20p.
Rearrange: 30p = 420 or p = 14. Plug this into either S or D to get Q: Q = 400 - 20(14 ) = 120.
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