Homework SourseThe market for gravel has been estimated to have the followi
The market for gravel has been estimated to have the following supply and demand relationships:
P = 100 - .01QD
P = 10 + .01QS
Calculate the equilibrium price and quantity.
Solution
In equilibrium, demand price = supply price
100 - 0.01Q = 10 + 0.01Q
0.02Q = 90
Q = 90 / 0.02 = 4,500
P = 10 + (0.01 x 4,500) = 10 + 45 = 55
