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
