The market demand and supply equation for a product are

QD = 30 − 3P

QS = 20 + 2P

Here Q for quantity: P for price

What is the equilibrium demand?

Question

Question

This question was previously asked in

UGC NET (Management) Official Paper-II (Held On: 12 Mar, 2023 Shift 2)

Answer 1

The correct answer is 24.

Key Points To find the equilibrium demand, we need to set the quantity demanded equal to the quantity supplied:

QD = QS

30 − 3P = 20 + 2P

Subtracting 2P from both sides:

30 − 5P = 20

Subtracting 20 from both sides:

10 = 5P

Dividing both sides by 5:

2 = P

Therefore, the equilibrium price is P = 2.

To find the equilibrium demand, we substitute P = 2 into the demand equation:

QD = 30 − 3P = 30 − 3(2) = 24

So the equilibrium demand is QD = 24.

Download Solution PDF