Chapter 6 Notes on Economics
Market Equilibrium. Quantity Demanded = Quantity Supplied. Finding the equilibrium price and quantity levels….. In general, Demand Function: QD = a + bP. Supply Function: QS = c + dP. Set QD = QS and solve simultaneously for Pe = (a - c)/(d - b) Knowing Pe, find Qe given the demand/supply functions. Qe = (ad - bc)/(d - b) Eg.1 . QD = 50 – P (i) ................
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