Question

Assume in a market individual supply function of a commodity A is given by SA=4PA-6 and individual demand function is DA=8-2P. Ttere are 2000 suppliers of commodity A with identical supply function and there are 4000 buyers of the commodity A with identical demand function , where SA is quantity supplied , DA is quantity demanded and PA is price of commodity A. Find
A) Market Equilibrium price (PA)
B) Equilibrium quantity (Qd)

Answer 1

A) Market Equilibrium Price (PA):
PA = 4

B) Equilibrium Quantity (Qd):
Qd = 2000