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The demand curve for a flight between SFO and LAX is given by PD = 350 - 2QD. The supply curve for the same flight is given by PS = 50 + QS. What is the equilibrium price? Provide answer without the dollar sign.

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onyebuchinnaji

Answer:

The equilibrium price is 150

Explanation:

At the equilibrium price, the quantity supplied is equal to quantity demanded.

Given;

[tex]P_D = 350-2Q_D\\\\[/tex]

[tex]P_S = 50 + Q_S[/tex]

At equilibrium price, [tex]Q_D = Q_S \ \ \ and \ \ \ P_D=P_S = P[/tex]

[tex]350-2Q_D = 50 + Q_S\\\\350-50 = Q_S+2Q_D\\\\Recall, Q_S = Q_D\\\\300 = 3Q_D\\\\Q_D = \frac{300}{3}\\\\ Q_D = Q_S = 100 \ units[/tex]

The equilibrium price is given by;

P = 50 + Qs

P = 50 + 100

P = 150

Therefore, the equilibrium price is 150

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