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Power School of Technology: Basic Microeconomics

This document contains a microeconomics activity that: 1) Defines the demand and supply equations as Qd = 20 - 2P and Qs = -10 + 2P. 2) Calculates the equilibrium price (P=7.5) and quantity (Qe=5) by setting the demand and supply equations equal to each other. 3) Presents a table showing quantity demanded and supplied at different price levels, and whether there is a shortage or surplus at each price. The market reaches equilibrium at a price of 7.5.

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Arnold Quachin Tanay
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49 views5 pages

Power School of Technology: Basic Microeconomics

This document contains a microeconomics activity that: 1) Defines the demand and supply equations as Qd = 20 - 2P and Qs = -10 + 2P. 2) Calculates the equilibrium price (P=7.5) and quantity (Qe=5) by setting the demand and supply equations equal to each other. 3) Presents a table showing quantity demanded and supplied at different price levels, and whether there is a shortage or surplus at each price. The market reaches equilibrium at a price of 7.5.

Uploaded by

Arnold Quachin Tanay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 5

POWER SCHOOL OF TECHNOLOGY

BASIC MICROECONOMICS

Name: Christine C. Tanay Date: October 7, 2020

Course/ Year: BSBA – FM 2ND YEAR Score:___________

Activity # 05
Due Date: October 12, 2020
Given the following Demand and Supply Equation:
Qd = 20 – 2P
Qs = -10 + 2P

a. Determine Qe and Pe.


b. Determine the Qd and Qs per price P and indicate if Surplus or Shortage.

Price (£) Qd Qs Surplus / Shortage


0 20 -10 Shortage
1 18 -8 Shortage
2 16 -6 Shortage
3 14 -4 Shortage
4 12 -2 Shortage
5 10 0 Shortage
6 8 2 Shortage
7 6 4 Shortage
7.5 5 5 Market Equilibrium
8 4 6 Surplus
9 2 8 Surplus
10 0 10 Surplus
11 -2 12 Surplus
12 -4 14 Surplus

1|Page
a. Determine Qe and Pe.

Qd = 20 – 2P
Qs = -10 + 2p
Set demand equal to supply:
Qd = Qs
20 – 2P = -10 + 2P
20 + 10 = 4P
30 = 4P
Simplify the equation by dividing 4 on both sides:
30/4 = 4P/4
P= 7.5
Therefore, the equilibrium price is 7.5

To get the equilibrium quantity, you just have to substitute into the supply or demand
equation. But this time we’re going to substitute P=7.5 to the demand equation:
Qd = 20 – 2P

Solve the equation:


= 20 – 2(7.5)
= 20-15
Qe = 5

b. Determine the Qd and Qs per price P and indicate if Surplus or Shortage.

2|Page
PRICE QD = 20 – 2P QS = -10 + 2P SHORTAGE or
SURPLUS

= 20 – 2 *0 = -10 + 2*0 Shortage, price


ceiling
0 = 20 = -10 + 0
= -10

= 20 – 2 *1 = -10 + 2*1 Shortage, price


ceiling
1 = 20 – 2 = -10 + 2
=18 = -8

= 20 – 2 *2 = -10 + 2*2 Shortage, price


ceiling
2 = 20 – 4 = -10 + 4
= 16 = -6

= 20 – 2 *3 = -10 + 2*3 Shortage, price


ceiling
3 =20 – 6 = -10 + 6
= 14 = -4

= 20 – 2 *4 = -10 + 2*4 Shortage, price


ceiling
4 = 20 – 8 = -10 + 8
= 12 = -2

3|Page
= 20 – 2 *5 = -10 + 2*5
5 = 20 – 10 = -10 + 10 Market Equilibrium
=10 =0

= 20 – 2 *6 = -10 + 2*6 Surplus, price


flooring
6 = 20 – 12 = -10+ 12
=8 =2

= 20 – 2 *7 = -10 + 2*7 Surplus, price


flooring
7 = 20 – 14 = -10 + 14
=6 =4

= 20 – 2 *7.5 = -10 + 2*7.5 Surplus, price


flooring
7.5 = 20 – 15 = -10 + 15
=5 =5

= 20 – 2 *8 = -10 + 2*8 Surplus, price


flooring
8 = 20 – 16 = -10 + 16
=4 =6

= 20 – 2 *9 = -10 + 2*9 Surplus, price


flooring
9 = 20 – 18 = -10 + 18
=2 =8

= 20 – 2 *10 = -10 + 2*10 Surplus, price


flooring
10 = 20 – 20 = -10 + 20
=0 = 10

4|Page
= 20 – 2 *11 = -10 + 2*11 Surplus, price
flooring
11 = 20 – 22 = -10 + 22
= -2 = 12

= 20 – 2 *12 = -10 + 2*12 Surplus, price


flooring
12 = 20 – 24 = -10 + 24
= -4 = 14

5|Page

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