Suppose that the market for corn is initially in equilibrium and is perfectly competitive. The demand curve can be expressed as $P = 10 - Q ^ { d }$; the supply curve can be expressed as $P =$ $0.25 Q ^ { s }$. Quantity is expressed in millions of bushels. What is the equilibrium quantity traded and price in this market?
A) $Q = 8 ; P = 2$
B) $Q = 2 ; P = 8$
C) $Q = 7 ; P = 3$
D) $Q = 3 ; P = 7$

Question

Quizplus · Accepted Answer

The equilibrium quantity is found by setting the demand and supply curves equal to each other:$$10 - Q ^ { d } = 0.25 Q ^ { s }$$$$10 - Q ^ { d } = 0.25 Q$$$$10 = 1.25 Q$$$$Q = 8$$The equilibrium price is then found by substituting the equilibrium quantity into either the demand or supply curve:$$P = 10 - Q ^ { d }$$$$P = 10 - 8$$$$P = 2$$Therefore, the equilibrium quantity traded is 8 million bushels and the equilibrium price is $2 per bushel.

Suppose That the Market for Corn Is Initially in Equilibrium P=10−QdP = 10 - Q ^ { d }P=10−Qd

Suppose That the Market for Corn Is Initially in Equilibrium $P = 10 - Q ^ { d }$