The demand and supply curves for the market are given by: Demand: Qd = 16000 – 24P Supply: Qs = 2000 + 32P
A maximum price of $200 is proposed.
(i) Calculate the equilibrium price that would prevail without the maximum price
1) Equilibrium : Qd = Qs
16000 - 24 P = 2000 + 32 P
or, 14000 = 56 P
or, P = 250 $
Without any price restriction , the equilibrium market price = $ 250
The demand and supply curves for the market are given by: Demand: Qd = 16000 –...
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