Suppose the demand equation is given by P=10-Q and the supply equation is given by P=2+Q. If the quantity bought and sold under a price floor is Q=2, what is the price floor?
To find the price floor, we need to set the quantity bought and sold under the price floor (Q) equal to 2:
Q = 2
We can substitute this value of Q into either the demand or supply equation to find the corresponding price. Using the demand equation:
P = 10 - Q
P = 10 - 2
P = 8
Therefore, the price floor is $8.
To find the price floor, we need to determine the price at which the quantity bought and sold is equal to Q=2.
We can set the quantity demanded equal to the quantity supplied:
10-Q = 2+Q
To solve for Q, we can rearrange the equation:
10 = 2 + 2Q
Subtracting 2 from both sides:
8 = 2Q
Dividing both sides by 2:
4 = Q
Now that we have found Q=4, we can substitute it into either the demand or supply equation to find the corresponding price. Let's use the supply equation:
P = 2 + Q
P = 2 + 4
P = 6
Therefore, the price floor is P=6.
To find the price floor, we need to set the quantity bought and sold (Q) equal to the given value of 2 and solve for the price (P).
Given:
Demand equation: P = 10 - Q
Supply equation: P = 2 + Q
Quantity bought and sold under price floor: Q = 2
Substitute Q = 2 into the supply equation:
P = 2 + 2
P = 4
Therefore, the price floor is P = 4.