Chapter 3A, Problem 3A.1CC

To determine

Calculate the equilibrium price and quantity demanded.

Explanation of Solution

From the given information $\text{P}=2{\text{Q}}^{\text{s}}$ and $\text{P}=\text{8}-2{\text{Q}}^{\text{d}}$, the equilibrium quantity of the product can be calculated as follows:

$\begin{array}{c}\text{Supply}=\text{Demand}\\ 2\text{Q}=\text{8}-2\text{Q}\\ 2\text{Q}+2\text{Q}=8\\ \text{Q}=\frac{8}{4}\\ =2\end{array}$

Thus, equilibrium quantity is 2.

Substitute the equilibrium quantity in supply equation to calculate euili9brium price.

$\begin{array}{c}\text{P}=2\text{Q}\\ =2\left(2\right)\\ =4\end{array}$

Thus, the equilibrium price is 4.

Economics Concept Introduction

Equilibrium price:  Equilibrium price is the market price that is determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.