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Suppose the demand for guitars in State College is given by Qd = 9000 - 12P where Qd is the quantity demanded, and P is the price of guitars. Also, suppose the supply of guitars is given by Qs = 9P - 3852, where Qs is the quantity supplied of guitars.Calculate the equilibrium price of guitars and the equilibrium quantity of guitars in State College.
Suppose the actual price of guitars is $600. Determine if there is a shortage, a surplus, or if the market is in equilibrium at a price of $600.
If there is a shortage or surplus, calculate how much the shortage or surplus is.
Given your answer to b), is the price of guitars likely to rise, fall, or stay the same?
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