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The demand and supply equations for a commodity are given respectively as D = 20...


Question

The demand and supply equations for a commodity are given respectively as D = 20 - (1/2)P; S = 8 + (1/4)P. Recalling that at equilibrium, D = S, the equilibrium (P) and quantity (Q) can be obtained as

Options

A)
P = 12, Q = 16
B)
P = 15, Q = 10
C)
P = 12, Q = 14
D)
P = 16, Q = 12

The correct answer is D.


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Discussion (2)

  • Given that D= S,
    20-1/2p= 8+1/4p
    20-8= 1/4p+1/2p
    12= 3p/4
    3p= (12)(4)
    3P= 48
    3p/3= 48/3
    P= 16
    Q= S or Q= D
    Q= 8+1/4p
    Q= 8+1/4(16)
    Q= 8+4
    Q= 12
    Therefore, P= 16, Q= 12

    Reply
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    1. Azeez

      From the space which you collect like terms
      20-8 = 1/4p + 1/2p
      12 = and how did you calculate 1/4 + 1/2 to give you 3p /4 ??