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The supply and demand functions for a good are respectively QS = 2P – 4 and...

The supply and demand functions for a good are respectively QS = 2P – 4 and QD = 60 – 2P + 2I, with I representing income, P the market price, QS the quantity supplied, and QD the quantity demanded. a) If I = 18, determine i) The equilibrium price; ii) The equilibrium quantity. b) Suppose the income increases to I = 22. Determine i) The quantity demanded at the initial equilibrium price; ii) The equilibrium price; iii) The equilibrium quantity.

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Rahul Sunny answered 1 year ago
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