What is quantity demanded and quantity supplied of cars

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Reference no: EM131091591

Consider the market for cars in a small country. Suppose the demand and supply curves for cars have been estimated and are given by

D(p) = 1100 − 50p and S(p) = 200 + 100p

where D(p) is the quantity demanded when the price for cars is p, and similarly, S(p) is the quantity supplied at price p.

NOTE: In your analysis, consider only the areas with non-negative prices.

(a) Suppose the prevailing price is the (free-trade) world price pF T = 4.5. At this price, what is the quantity demanded and the quantity supplied of cars? What are the imports/exports of cars?

Reference no: EM131091591

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