Determination of Equilibrium Price And Quantity - SS2 Economics Past Questions and Answers - page 1
What happens to the equilibrium price if there is an increase in demand and no change in supply?
Increases
Decreases
Stays the same
Cannot be determined
What happens to the equilibrium quantity if there is a decrease in supply and no change in demand?
Increases
Decreases
Stays the same
Cannot be determined
What happens to the equilibrium price and quantity if there is an increase in both supply and demand?
Price increases and quantity increases
Price decreases and quantity decreases
Price increases and quantity decreases
Price decreases and quantity increases
What is the equilibrium point in a market?
The point at which the supply and demand curves intersect in a market, resulting in a quantity of a product that consumers are willing to buy and producers are willing to sell, and a price at which they are willing to exchange it.
Suppose the demand curve for a product is Qd = 80 - P and the supply curve is Qs = 30 + 2P. What is the equilibrium price and quantity?
Setting Qd = Qs, we have:
80 - P = 30 + 2P
Simplifying the equation, we get:
50 = 3P
P = 16.67
Substituting P = 16.67 into either the demand or supply equation, we get:
Qd = 80 - 16.67 = 63.33
Qs = 30 + 2(16.67) = 63.33
The equilibrium price is $16.67 and the equilibrium quantity is 63.33 units (rounded to two decimal places).
Suppose the demand curve for a product is Qd = 200 - 3P and the supply curve is Qs = 40 + P. What is the equilibrium price and quantity?
Setting Qd = Qs, we have:
200 - 3P = 40 + P
Simplifying the equation, we get:
160 = 4P
P = 40
Substituting P = 40 into either the demand or supply equation, we get:
Qd = 200 - 3(40) = 80
Qs = 40 + (40) = 80
The equilibrium price is $40 and the equilibrium quantity is 80 units.