Question

What type of equation is the following equation Q + 9P = 876? *

a) Demand only

b) Supply only

c) Demand or supply

d) Cannot be determined

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Based on the following two equations, Q + 4P = 141 & -6 = 5P - Q, what is the equilibrium quantity? Please only type the number (do not use commas, decimal points or letters). *

Answer 1

(1) Q + 9P = 876

=> Q = 876 - 9P

The quantity (Q) and price (P) are negatively related, i.e., increase in price (P) will decrease the Quantity ( Q) or decrease in Price (P) will increase the Quantity (Q).

This implies that, the above equation is demand equation.

Answer: Option (a) i.e., Demand only.

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(2) Q + 4P = 141

=> Q = 141 - 4P (Demand equation)

-6 = 5P -Q

=> Q = 5P + 6 (Supply Equation)

At equilibrium point, demand = supply.

=> 5P + 6 = 141 - 4P

=> 5P + 4P = 141 - 6

=> 9P = 135

=> P = 15 (Equilibrium price)

and, Q = 5P + 6

=> Q = 5(15) + 6

=> Q = 81 (Equilibrium quantity)