Answer in Microeconomics for Ahmad Shaarawi #111625
1.To find equilibrium price and quantity we need to solve this equation:
So, P=15.5 and Q=1062.5.
2.When the price is $40 the quantity demanded is 450, but the quantity supplied is 2900. So suplly exceedes suply.
3.In such circumstances the amount actually sold on the market will be 450. In long-run the suply curve will shift to the left and new equilibrium(with higher price and higher quantity) will be established.
4.When the price is $10, the quantity demanded is 1200, but the quantity suplied is 250.
5.The quantity which will be sold on the market will be 250. In long-run the suply curve will shift to the right and new equilibrium(with lower price and higher quantity) will be established.