Managerial Economics
The following relations describe the supply and demand for posters.
Qd = 65,000 – 10,000 P
Qs = -35,000 + 15,000P
Where Q is the quantity and P is the price of a poster, in dollars.
a. Complete the following table.
Price Qs Qd Surplus or Shortage
$6.00
5.00
4.00
3.00
2.00
1.00
b. What is the equilibrium price?
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Answers
The equilibrium price is $3.00. This is where the quantity supplied is equal to the quantity demanded, and no surplus or shortage of posters will exist. At a price of $3.00, the quantity supplied is 35,000, and the quantity demanded is also 35,000.
