The demand curve and supply curve for oneyear discount bonds

The demand curve and supply curve for one-year discount bonds with a face value of $1,000 are represented by the following equations: Bd: Price0.6Quantity+ 1,160 BS: PriceQuantity+ 690 The expected equilibrium quantity of bonds is(Round your response to the nearest whole number.)

Solution

The equilibrium is the point where the quantity demanded = quantity supplied and is shown by the intersection of the demand and supply curve.

Equating we have

-0.6Q+1160=Q+690

1160-690=1.6Q

470=1.6Q

Q=294

 The demand curve and supply curve for one-year discount bonds with a face value of $1,000 are represented by the following equations: Bd: Price0.6Quantity+ 1,1

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