Question

"i" companies operate in the frozen fish market, each of which has the following supply function Q_i^s = 10+ P (i = 1,2,3 .., 100),
and there are 200 consumers each of whom has the following individual demand function Q_i^d = 20-P (i = 1,2,3 ..., 200). Build supply and demand
From the market. Determine the equilibrium price and quantity. What happens if the price drops to half the equilibrium price? What happens if the price rises to half the
equilibrium price?

Answer 1

Supply of individual companies Qi' - 10+P supply of 100 such companies (Market Supply Q = 100Q = 100 (roup) 1000 + 100 p demand of individual consumers Qid - 20-P Marke Demand 0 - 200xQid - 200*(20-23 ooo 4000 200P Qs = od [ To determine equam aty & price 1000+100p - 4000-200 P 100 p + 200 p = 7000-1000 300p - 3000 P- 3000 300 P = 10 1/3

1000+100P = 4000 - 200p Q* = 1000+ 100pt E 1000 + 100 x 10 a 1000 + 1ooo * - 2000 If price doops to half the equemprice new P = 1 x * = 1 x P* 5 Ixto p = 5 at new = 5 QS= 1000+100 pnew 1000 + 100X5 15oo Qs Q = 4000-200 phew - 4000 – 2000 5 4000 - 1000 2/3

Q - 3000 Since Q5<QP, there will be a shortage of frozen fish If price rises to half the equby price (Question is wrong. Price can't rise to half the equbom price - Price can only decrease to half the If price rises Q&>QD, there will be surplus of foorgen finsh- equbm) 3/3