Let demand be given by QD 8 2P let supply be given by QS

Let demand be given by Q^D = 8 – 2P; let supply be given by Q^S = 2P. What is the equilibrium price?

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Solution

Equilibrium condition: Qd = Qs

8 - 2P = 2P

8 = 4P

P = 8/4 = $ 2

Equilibrium price, P = $ 2