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1. Let demand for a product be given by the function qd=80-3p and supply be given by qs=2p-30.
a. Suppose the price in this market is $16. What are the quantity demanded and quantity supplied at this price? Is there a shortage or a surplus?
I got 80-3p=2p-30 p=22 which qd and qs =14 , there is a shortage
b. What are the equilibrium price and quantity in this market?
equilibrium price is 22, quantity is 14
c. Suppose the supply function shifts, doubling quantity supplied for every possible price. What is the new supply function? What are the new equilibrium price and quantity?
80-3p=2(2p-30) p=20 qd = 20 and qs =10
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