The market demand curve for a perfectly competitive industry is QD = 12 – 2P. The market supply curve is QS = 3 + P. The market will be in equilibrium at _____?
The market demand curve for a perfectly competitive industry is QD = 12 – 2P. The market supply curve is QS = 3 + P. The market will be in equilibrium at _____?
Explanation
To find the market equilibrium, set QD = QS:12 - 2P = 3 + P
Rearrange the equation:
3P = 9
P = 3
Now, substitute P = 3 into either QD or QS:
QS = 3 + P
= 3 + 3
= 6
So, the market equilibrium is at P = 3 and Q = 6.