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1. The market for a product is defined by the following demand and supply curves:                             &nbs

1. The market for a product is defined by the following demand and supply curves:

                                   Qd=20-7p

                                   Qs=-4+5P

where Qd and Qs are the quantities demanded and supplied, and P is the price of the product in £s.

(i) Draw (accurately) a diagram to depict the market for this product and determine the equilibrium price and quantity.

(ii) Solve for the equilibrium market price and quantity mathematically (remember that, in equilibrium, Qd=Qs).

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Answer #1

and quantity For equilibrium frica Demand = Supply Qo? Qg 20-AP = 4+5p 24 = 12P p= $2 Equilibrium price 20-70 20- 7x2 19 6 →

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