Question

When the price of a good is $5, the quantity demanded of a good is 30 units, and the quantity supplied of the good is 50 units. For every $1 decrease in the price of this good, quantity demanded rises by 5 units and quantity supplied falls by 5 units. The equilibrium price of this good is ___________and the equilibrium quantity of this good is _________ units.

Answer 1

Answer:

the equilibrium price is $3 and equilibrium quantity is 40

Explanation:

The computation of the equilibrium price and quantity is shown below:

Price       Quantity demanded          Quantity supplied

$5                 30                                     50

$4                  35                                     45

$3                  40                                     40

$2                  45                                      35

$1                   50                                      30            

The equilibrium price is the price where the quantity demanded is equivalent to the quantity supplied        

So the equilibrium price is $3 and equilibrium quantity is 40