Industry supply and demand are given by QD = 1000 - 2P and QS = 3P
a. What is the equilibrium price and quantity?
b. At a price of $100, will there be a shortage or a surplus, and how large will it be?
c. At a price of $300, will there be a shortage or a surplus, and how large will it be?
a. P = $200, Q = 600.
b. At a price of $100, there will be a shortage. The quantity demanded will be 800, and the quantity supplied will be 300, and thus there will be a shortage of 500 units.
c. At a price of $300, there will be a surplus. The quantity demanded will be 400, and the quantity supplied will be 900, and thus there will be a surplus of 600 units.
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