Question

In: Economics

After some diligence, Warren’s council of economic advisors plots out the private supply and demand curves for burgers.

Using the article "https://www.nytimes.com/2014/07/16/opinion/the-true-cost-of-a-burger.html"

After some diligence, Warren’s council of economic advisors plots out the private supply and demand curves for burgers. They are:

Demand (private): Q=34-4P Supply (private): Q=7+2P Where “Q” is given in billions

Find private equilibrium price and quantity

Solutions

Expert Solution

Demand (private): Q = 34 - 4P

Supply (private): Q = 7 + 2P

At private equilibrium point; Demand = Supply

=> 34 - 4P = 7 + 2P

=> 34 - 7 = 2P + 4P

=> 27 = 6P

=> P = (27 /6)

=> P = 4.5

Private Equilibrium price is 4.5

----

and

Q = 7 + 2P

=> Q = 7 + 2(4.5)

=>Q = 7 + 9

=>Q = 16

Private equilibrium quantity is 16

Rahul Sunny answered 2 years ago
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