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In: Economics

Consider the following hypothetical market for CDs. Suppose that the demand curve for CDs is given...

Consider the following hypothetical market for CDs. Suppose that the demand curve for CDs is given by QD=200-10P and suppose that the supply curve for CDs is give by QS=20P-100. a) Sketch the supply curve and the demand curve. b) What are the equilibrium price and quantity of CDs? c) Calculate the amount consumers paid (in total) for CDs

Solutions

Expert Solution

a)

b) Equilibrium occurs when demand = supply

200 - 10P = 20P - 100

P = 10

At this P, Q = 100

c) Total price paid by consumer at equilibrium 10 * 100 = 1,000

Rahul Sunny answered 2 years ago
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