SOLUTION: If the demand and supply functions of a good are given as Qd = 250-3P Qs = 2P – 50 a Determine the price elasticity of demand and supply at equilibrium. b From the above inf

Algebra ->  Coordinate Systems and Linear Equations  -> Linear Equations and Systems Word Problems -> SOLUTION: If the demand and supply functions of a good are given as Qd = 250-3P Qs = 2P – 50 a Determine the price elasticity of demand and supply at equilibrium. b From the above inf      Log On


   

Question 1086429: If the demand and supply functions of a good are given as
Qd = 250-3P
Qs = 2P – 50
a Determine the price elasticity of demand and supply at equilibrium.
b From the above information, would there be shortage or surplus if government decides the market price to be 75 units? How much will it be?

Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
Set them equal to each other
250-3P=2P-50
300=5P
P=60 at equilibrium
If the market price were 75 units
Qd=250-225=25
Qs=150-50=100
Lot of supply, not much demand. Surplus of 75 units.