Q. Assume market demand for good X is given by equation Qd = 100 - 20P
Market supply is given by equation Qs = 500 + 30P
(a) Find out QD and QS when cost of good X is $12.00. Is re a surplus or shortage? Illustrate what should happen to cost of Good X to drive it to Equilibrium?
(b) Find out equilibrium cost for Good X by equating Qd and Qs