CIMA BA1 · Chapter 5 · Question 4 of 10
In a market, demand is Qd = 500 - 5P and supply is Qs = -100 + 5P, where P is price in $. What are the equilibrium price and quantity?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Price $60, quantity 200 units
Explanation
At equilibrium Qd = Qs: 500 - 5P = -100 + 5P, so 600 = 10P and P = $60. Quantity = 500 - 5 x 60 = 200 units (check: -100 + 5 x 60 = 200).
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