Question

The demand curve is P = 300-9Qp. The supply curve is P = 200 + 4Qs

At market equilibrium, what is the equilibrium price?
At market equilibrium, the equilibrium price is
A. 7.7
B. 4
C. 0.13
O D. 230.77

Answer 1

Answer: D, 230.77

Explanation: Market equilibrium is found when the demand curve and supply curve intersect, meaning that you can set the equations of the respective lines equal to each other in order to find Q, or quantity.

300-9Q = 200 + 4Q

Q = roughly 7.7

With equilibrium quantity found, you can now plug the value into either the equation for the demand or supply curve and come out with your equilibrium price:

300 - 9(7.7) = 200 + 4(7.7) = roughly 230.77