posted by SadBob on .
A market has the following demand and supply equations:
Qd = -50P + 1000
Qs = 150P - 400
Which of the following statements is true?
a. If the price were $9, a surplus of 300 units would exist and price would tend to fall.
b. If the price were $3, a shortage of 800 units would exist and price would tend to rise.
c. The equilibrium price and quantity, respectively are $8 and 600 units.
d. The equilibrium price and quantity, respectively are $6 and 500 units.
Plug in $9 and $3 for P and see what you get for Qd and Qs.
For the equilibrium proce, set Qd = Qs and solve for P. See if it agrees with c. or d.
I see two correct choices.