Question 1

Given the following demand and supply equations from Ex 1:

$$Q_d = 100 - 2P$$

$$Q_s = -20 + 3P$$

What is the equilibrium price ($$P^*$$)?

Accepted Answer

$$P^* = 24$$

Question 2

For Ex 2, the demand and supply equations are:

$$Q_d = 80 - 2P$$

$$Q_s = 10 + P$$

What is the equilibrium quantity ($$Q^*$$)?

Accepted Answer

$$Q^* = 44$$

Question 3

Suppose a government sets a price ceiling at $$P = 10$$ for the market in Ex 3:

$$Q_d = 120 - 4P$$

$$Q_s = 40 + 2P$$

What is the resulting shortage or surplus?

Accepted Answer

There is a shortage of 40 units.

Question 4

In Ex 4, the demand and supply equations are:

$$Q_d = 90 - 3P$$

$$Q_s = -15 + 2P

If $$the government imposes a price floor at $$P = 25$$, what is the surplus?

Accepted Answer

Surplus of 40 units

Question 5

For Ex 5, find the equilibrium price ($$P^*) $$and quantity ($$Q^*$$):

$$Q_d = 150 - 5P$$

$$Q_s = 30 + 3P$$

Accepted Answer

$$P^* = 15, Q^* = 75$$

Question 6

In Ex 6, if the government imposes a tax that shifts the supply curve vertically upward by 2 units, what is the new equilibrium price?

Original equations:
$$Q_d = 70 - 2P$$
$$Q_s = 5 + P$$

Accepted Answer

$$P^* = 22$$

Question 7

For Ex 7, if the demand increases by 10 units at every price (i.e., $$Q_d$$ becomes $$Q_d = 120 - 6P$$), what is the new equilibrium price?

Original equations:
$$Q_d = 110 - 6P$$
$$Q_s = 20 + 4P$$

Accepted Answer

$$P^* = 10$$

Question 8

In Ex 8, what is the price elasticity of demand at the equilibrium price?

$$Q_d = 60 - P$$
$$Q_s = 10 + 2P$$

Accepted Answer

Elasticity is $$-2$$

Question 9

For Ex 9, if the government sets a price ceiling at $$P = 100$$, what is the resulting shortage or surplus?

$$Q_d = 90 - 0.5P$$
$$Q_s = -20 + 0.2P$$

Accepted Answer

Shortage of 34 units

Question 10

In Ex 10, what is the equilibrium price ($$P^*$$)?

$$Q_d = 100 - 0.6P$$
$$Q_s = -20 + 0.3P$$

Accepted Answer

$$P^* = 150$$

Question 11

Suppose in Ex 1, a technological improvement increases supply by 20 units at every price. What is the new equilibrium price?

Original equations:
$$Q_d = 100 - 2P$$
$$Q_s = -20 + 3P$$

New supply: $$Q_s = 0 + 3P$$

Accepted Answer

$$P^* = 20$$

Question 12

In Ex 3, if the government imposes a quota limiting supply to 60 units, what is the resulting market price?

$$Q_d = 120 - 4P$$
$$Q_s = 40 + 2P$$

Accepted Answer

$$P = 12.5$$

Question 13

For Ex 2, if the government provides a subsidy that increases supply by 10 units at every price, what is the new equilibrium quantity?

Original equations:
$$Q_d = 80 - 2P$$
$$Q_s = 20 + P$$

Accepted Answer

$$Q^* = 46$$

Question 14

In Ex 5, if the demand decreases by 30 units at every price, what is the new equilibrium price?

Original equations:
$$Q_d = 150 - 5P$$
$$Q_s = 30 + 3P$$

Accepted Answer

$$P^* = 11.25$$

Question 15

For Ex 8, if the government imposes a price floor at $$P = 30$$, what is the resulting surplus or shortage?

$$Q_d = 60 - P$$
$$Q_s = 10 + 2P$$

Accepted Answer

Surplus of 30 units

Question 16

In Ex 6, if the supply curve becomes more elastic (the coefficient of $$P in$$ $$Q_s$$ increases from 1 to 2), what happens to the equilibrium price?

Accepted Answer

It decreases

Question 17

For Ex 4, if both demand and supply increase by 10 units at every price, what happens to the equilibrium price?

Accepted Answer

It stays the same

Question 18

In Ex 10, if the demand curve becomes steeper (the coefficient of $$P$$ changes from $$-0.6 to$$ $$-1.2$$), what happens to the equilibrium price?

Accepted Answer

It decreases

Question 19

Suppose in Ex 7, a natural disaster reduces supply by 10 units at every price. What is the new equilibrium price?

Original equations:
$$Q_d = 110 - 6P$$
$$Q_s = 10 + 4P$$

Accepted Answer

$$P^* = 12$$

Market Equilibrium: Demand and Supply Equation Examples

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