Question1 HINT Remember Qs must equal Od at equilibrium Supp

Question1 HINT: Remember Qs must equal Od at equilibrium Suppose the supply and demand curves are given by QD 100-2P Qs- 20+4P a. Find the equilibrium price and quantity b. If the current price is $ 10, what is the quantity demanded and quantity supplied and what happens in the market for this product?

Solution

If QD = 100-2P

Qs = -20+4P

Equilibrium is established where Qd = Qs

100-2P = -20+4P

6P = 120

P = 20

Q = 100-2(20) = 60 units

If Price = 10

QD = 100-2(10) = 80 units

Qs = -20+4(10) = 20 units

There is excess demand

Answer2: Number of tickets sold will decrease by 2.5 times.

Total revenue will depend on price elasticity information about which i snot given.